Correlation Between A Cap and Talga Group

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

By analyzing existing cross correlation between A Cap Energy Limited and Talga Group, you can compare the effects of market volatilities on A Cap and Talga Group 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 A Cap with a short position of Talga Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of A Cap and Talga Group.

Diversification Opportunities for A Cap and Talga Group

0.0

Correlation Coefficient

A Cap  Talga Group

Pay attention - limited upside

The 3 months correlation between APCDF and Talga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding A Cap Energy Limited and Talga Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talga Group and A Cap 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 A Cap Energy Limited are associated (or correlated) with Talga Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talga Group has no effect on the direction of A Cap i.e., A Cap and Talga Group go up and down completely randomly.

Pair Corralation between A Cap and Talga Group

If you would invest  26.00  in Talga Group on December 28, 2024 and sell it today you would earn a total of  4.00  from holding Talga Group or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

A Cap Energy Limited  vs.  Talga Group

A Cap Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days A Cap Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, A Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Talga Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Talga Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Talga Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with A Cap and Talga Group

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

The idea behind A Cap Energy Limited and Talga 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.