Correlation Between TSI and Aprogen Healthcare

Can any of the company-specific risk be diversified away by investing in both TSI and Aprogen Healthcare 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 TSI and Aprogen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TSI Co and Aprogen Healthcare Games, you can compare the effects of market volatilities on TSI and Aprogen Healthcare 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 TSI with a short position of Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSI and Aprogen Healthcare.

Diversification Opportunities for TSI and Aprogen Healthcare

0.28

Correlation Coefficient

TSI  Aprogen Healthcare

Modest diversification

The 3 months correlation between TSI and Aprogen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding TSI Co and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games and TSI 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 TSI Co are associated (or correlated) with Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of TSI i.e., TSI and Aprogen Healthcare go up and down completely randomly.

Pair Corralation between TSI and Aprogen Healthcare

Assuming the 90 days trading horizon TSI Co is expected to generate 0.99 times more return on investment than Aprogen Healthcare. However, TSI Co is 1.01 times less risky than Aprogen Healthcare. It trades about 0.21 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.15 per unit of risk. If you would invest  486,500  in TSI Co on October 23, 2024 and sell it today you would earn a total of  65,500  from holding TSI Co or generate 13.46% return on investment over 90 days.

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

TSI Co  vs.  Aprogen Healthcare Games

TSI Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen Healthcare Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Aprogen Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TSI and Aprogen Healthcare

The main advantage of trading using opposite TSI and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSI position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.

The idea behind TSI Co and Aprogen Healthcare Games 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.