Correlation Between TPG Telecom and Apiam Animal

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

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

Diversification Opportunities for TPG Telecom and Apiam Animal

0.49

Correlation Coefficient

TPG Telecom  Apiam Animal

Very weak diversification

The 3 months correlation between TPG and Apiam is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom and Apiam Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apiam Animal Health and TPG Telecom 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 TPG Telecom are associated (or correlated) with Apiam Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apiam Animal Health has no effect on the direction of TPG Telecom i.e., TPG Telecom and Apiam Animal go up and down completely randomly.

Pair Corralation between TPG Telecom and Apiam Animal

Assuming the 90 days trading horizon TPG Telecom is expected to generate 1.85 times less return on investment than Apiam Animal. But when comparing it to its historical volatility, TPG Telecom is 2.12 times less risky than Apiam Animal. It trades about 0.07 of its potential returns per unit of risk. Apiam Animal Health is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Apiam Animal Health on October 22, 2024 and sell it today you would earn a total of  1.00  from holding Apiam Animal Health or generate 2.56% return on investment over 90 days.

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

TPG Telecom  vs.  Apiam Animal Health

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 comparatively stable technical and fundamental indicators, TPG Telecom is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Apiam Animal Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apiam Animal Health 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 basic 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 TPG Telecom and Apiam Animal

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

The idea behind TPG Telecom and Apiam Animal Health 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.