Correlation Between TGCC SA and HIGHTECH PAYMENT

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

By analyzing existing cross correlation between TGCC SA and HIGHTECH PAYMENT SYSTEMS, you can compare the effects of market volatilities on TGCC SA and HIGHTECH PAYMENT 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 TGCC SA with a short position of HIGHTECH PAYMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGCC SA and HIGHTECH PAYMENT.

Diversification Opportunities for TGCC SA and HIGHTECH PAYMENT

-0.5

Correlation Coefficient

TGCC SA  HIGHTECH PAYMENT

Very good diversification

The 3 months correlation between TGCC and HIGHTECH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding TGCC SA and HIGHTECH PAYMENT SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIGHTECH PAYMENT SYSTEMS and TGCC SA 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 TGCC SA are associated (or correlated) with HIGHTECH PAYMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIGHTECH PAYMENT SYSTEMS has no effect on the direction of TGCC SA i.e., TGCC SA and HIGHTECH PAYMENT go up and down completely randomly.

Pair Corralation between TGCC SA and HIGHTECH PAYMENT

Assuming the 90 days trading horizon TGCC SA is expected to generate 1.33 times more return on investment than HIGHTECH PAYMENT. However, TGCC SA is 1.33 times more volatile than HIGHTECH PAYMENT SYSTEMS. It trades about 0.25 of its potential returns per unit of risk. HIGHTECH PAYMENT SYSTEMS is currently generating about 0.06 per unit of risk. If you would invest  47,100  in TGCC SA on December 30, 2024 and sell it today you would earn a total of  22,900  from holding TGCC SA or generate 48.62% return on investment over 90 days.

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

TGCC SA  vs.  HIGHTECH PAYMENT SYSTEMS

TGCC SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TGCC SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, TGCC SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

HIGHTECH PAYMENT SYSTEMS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HIGHTECH PAYMENT SYSTEMS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, HIGHTECH PAYMENT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TGCC SA and HIGHTECH PAYMENT

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

The idea behind TGCC SA and HIGHTECH PAYMENT SYSTEMS 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 Global Correlations module to find global opportunities by holding instruments from different markets.