Correlation Between Ironbark Capital and TPG Telecom

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

By analyzing existing cross correlation between Ironbark Capital and TPG Telecom, you can compare the effects of market volatilities on Ironbark Capital and TPG Telecom 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 Ironbark Capital with a short position of TPG Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and TPG Telecom.

Diversification Opportunities for Ironbark Capital and TPG Telecom

-0.25

Correlation Coefficient

Ironbark Capital  TPG Telecom

Very good diversification

The 3 months correlation between Ironbark and TPG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and TPG Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Telecom and Ironbark Capital 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 Ironbark Capital are associated (or correlated) with TPG Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Telecom has no effect on the direction of Ironbark Capital i.e., Ironbark Capital and TPG Telecom go up and down completely randomly.

Pair Corralation between Ironbark Capital and TPG Telecom

Assuming the 90 days trading horizon Ironbark Capital is expected to generate 0.78 times more return on investment than TPG Telecom. However, Ironbark Capital is 1.28 times less risky than TPG Telecom. It trades about 0.02 of its potential returns per unit of risk. TPG Telecom is currently generating about 0.0 per unit of risk. If you would invest  44.00  in Ironbark Capital on October 11, 2024 and sell it today you would earn a total of  3.00  from holding Ironbark Capital or generate 6.82% return on investment over 90 days.

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

Ironbark Capital  vs.  TPG Telecom

Ironbark Capital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ironbark Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TPG Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TPG Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ironbark Capital and TPG Telecom

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

The idea behind Ironbark Capital and TPG Telecom 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.