Correlation Between Tupy SA and PDG Realty

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

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

Diversification Opportunities for Tupy SA and PDG Realty

0.01

Correlation Coefficient

Tupy SA  PDG Realty

Significant diversification

The 3 months correlation between Tupy and PDG is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tupy SA and PDG Realty SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDG Realty SA and Tupy 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 Tupy SA are associated (or correlated) with PDG Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDG Realty SA has no effect on the direction of Tupy SA i.e., Tupy SA and PDG Realty go up and down completely randomly.

Pair Corralation between Tupy SA and PDG Realty

Assuming the 90 days trading horizon Tupy SA is expected to generate 0.16 times more return on investment than PDG Realty. However, Tupy SA is 6.29 times less risky than PDG Realty. It trades about 0.07 of its potential returns per unit of risk. PDG Realty SA is currently generating about 0.01 per unit of risk. If you would invest  1,893  in Tupy SA on December 1, 2024 and sell it today you would earn a total of  167.00  from holding Tupy SA or generate 8.82% return on investment over 90 days.

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

Tupy SA  vs.  PDG Realty SA

Tupy SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tupy SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tupy SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PDG Realty SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days PDG Realty SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, PDG Realty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tupy SA and PDG Realty

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

The idea behind Tupy SA and PDG Realty SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.