Correlation Between Tecom and Progate

Can any of the company-specific risk be diversified away by investing in both Tecom and Progate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tecom and Progate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tecom Co and Progate Group, you can compare the effects of market volatilities on Tecom and Progate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tecom with a short position of Progate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecom and Progate.

Diversification Opportunities for Tecom and Progate

-0.45

Correlation Coefficient

Tecom  Progate

Very good diversification

The 3 months correlation between Tecom and Progate is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tecom Co and Progate Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progate Group and Tecom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tecom Co are associated (or correlated) with Progate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progate Group has no effect on the direction of Tecom i.e., Tecom and Progate go up and down completely randomly.

Pair Corralation between Tecom and Progate

Assuming the 90 days trading horizon Tecom Co is expected to under-perform the Progate. But the stock apears to be less risky and, when comparing its historical volatility, Tecom Co is 1.06 times less risky than Progate. The stock trades about -0.06 of its potential returns per unit of risk. The Progate Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  15,950  in Progate Group on September 16, 2024 and sell it today you would earn a total of  300.00  from holding Progate Group or generate 1.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tecom Co  vs.  Progate Group

Tecom

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tecom Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tecom may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Progate Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Progate Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Tecom and Progate

The main advantage of trading using opposite Tecom and Progate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecom position performs unexpectedly, Progate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Progate will offset losses from the drop in Progate's long position.

The idea behind Tecom Co and Progate Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.