Correlation Between TPG Telecom and GEN Restaurant

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

By analyzing existing cross correlation between TPG Telecom Limited and GEN Restaurant Group,, you can compare the effects of market volatilities on TPG Telecom and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and GEN Restaurant.

Diversification Opportunities for TPG Telecom and GEN Restaurant

0.87

Correlation Coefficient

TPG Telecom  GEN Restaurant

Very poor diversification

The 3 months correlation between TPG and GEN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom Limited and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 Limited are associated (or correlated) with GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of TPG Telecom i.e., TPG Telecom and GEN Restaurant go up and down completely randomly.

Pair Corralation between TPG Telecom and GEN Restaurant

Assuming the 90 days horizon TPG Telecom Limited is expected to under-perform the GEN Restaurant. But the pink sheet apears to be less risky and, when comparing its historical volatility, TPG Telecom Limited is 1.62 times less risky than GEN Restaurant. The pink sheet trades about -0.12 of its potential returns per unit of risk. The GEN Restaurant Group, is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  735.00  in GEN Restaurant Group, on December 26, 2024 and sell it today you would lose (161.00) from holding GEN Restaurant Group, or give up 21.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

TPG Telecom Limited  vs.  GEN Restaurant Group,

TPG Telecom Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPG Telecom Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with TPG Telecom and GEN Restaurant

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

The idea behind TPG Telecom Limited and GEN Restaurant 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.