Correlation Between TSOGO SUN and GALP ENERGIA
Can any of the company-specific risk be diversified away by investing in both TSOGO SUN and GALP ENERGIA 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 TSOGO SUN and GALP ENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSOGO SUN GAMING and GALP ENERGIA B , you can compare the effects of market volatilities on TSOGO SUN and GALP ENERGIA 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 TSOGO SUN with a short position of GALP ENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and GALP ENERGIA.
Diversification Opportunities for TSOGO SUN and GALP ENERGIA
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between TSOGO and GALP is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING and GALP ENERGIA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALP ENERGIA B and TSOGO SUN 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 TSOGO SUN GAMING are associated (or correlated) with GALP ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALP ENERGIA B has no effect on the direction of TSOGO SUN i.e., TSOGO SUN and GALP ENERGIA go up and down completely randomly.
Pair Corralation between TSOGO SUN and GALP ENERGIA
Assuming the 90 days horizon TSOGO SUN GAMING is expected to generate 3.65 times more return on investment than GALP ENERGIA. However, TSOGO SUN is 3.65 times more volatile than GALP ENERGIA B . It trades about 0.06 of its potential returns per unit of risk. GALP ENERGIA B is currently generating about 0.02 per unit of risk. If you would invest 24.00 in TSOGO SUN GAMING on December 5, 2024 and sell it today you would earn a total of 20.00 from holding TSOGO SUN GAMING or generate 83.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
TSOGO SUN GAMING vs. GALP ENERGIA B
Performance |
Timeline |
TSOGO SUN GAMING |
GALP ENERGIA B |
TSOGO SUN and GALP ENERGIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TSOGO SUN and GALP ENERGIA
The main advantage of trading using opposite TSOGO SUN and GALP ENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSOGO SUN position performs unexpectedly, GALP ENERGIA 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 GALP ENERGIA will offset losses from the drop in GALP ENERGIA's long position.TSOGO SUN vs. Sportsmans Warehouse Holdings | TSOGO SUN vs. Nippon Light Metal | TSOGO SUN vs. Direct Line Insurance | TSOGO SUN vs. East Africa Metals |
GALP ENERGIA vs. Yanzhou Coal Mining | GALP ENERGIA vs. Harmony Gold Mining | GALP ENERGIA vs. JIAHUA STORES | GALP ENERGIA vs. MCEWEN MINING INC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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