Correlation Between TGI Solar and Dow Jones
Can any of the company-specific risk be diversified away by investing in both TGI Solar and Dow Jones 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 TGI Solar and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGI Solar Power and Dow Jones Industrial, you can compare the effects of market volatilities on TGI Solar and Dow Jones 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 TGI Solar with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGI Solar and Dow Jones.
Diversification Opportunities for TGI Solar and Dow Jones
Poor diversification
The 3 months correlation between TGI and Dow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TGI Solar Power and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and TGI Solar 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 TGI Solar Power are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of TGI Solar i.e., TGI Solar and Dow Jones go up and down completely randomly.
Pair Corralation between TGI Solar and Dow Jones
Given the investment horizon of 90 days TGI Solar Power is expected to generate 18.82 times more return on investment than Dow Jones. However, TGI Solar is 18.82 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.03 per unit of risk. If you would invest 0.08 in TGI Solar Power on December 26, 2024 and sell it today you would earn a total of 0.03 from holding TGI Solar Power or generate 37.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
TGI Solar Power vs. Dow Jones Industrial
Performance |
Timeline |
TGI Solar and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
TGI Solar Power
Pair trading matchups for TGI Solar
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TGI Solar and Dow Jones
The main advantage of trading using opposite TGI Solar and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGI Solar position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.TGI Solar vs. Solar Integrated Roofing | TGI Solar vs. Clear Blue Technologies | TGI Solar vs. ABCO Energy | TGI Solar vs. SunHydrogen |
Dow Jones vs. Pintec Technology Holdings | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Chiba Bank Ltd | Dow Jones vs. Alvotech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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