Correlation Between Abacus Storage and TPG Telecom

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

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

Diversification Opportunities for Abacus Storage and TPG Telecom

0.82

Correlation Coefficient

Abacus Storage  TPG Telecom

Very poor diversification

The 3 months correlation between Abacus and TPG is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Storage King and TPG Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Telecom and Abacus Storage 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 Abacus Storage King are associated (or correlated) with TPG Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Telecom has no effect on the direction of Abacus Storage i.e., Abacus Storage and TPG Telecom go up and down completely randomly.

Pair Corralation between Abacus Storage and TPG Telecom

Assuming the 90 days trading horizon Abacus Storage is expected to generate 1.31 times less return on investment than TPG Telecom. But when comparing it to its historical volatility, Abacus Storage King is 1.32 times less risky than TPG Telecom. It trades about 0.14 of its potential returns per unit of risk. TPG Telecom is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  518.00  in TPG Telecom on April 2, 2025 and sell it today you would earn a total of  18.00  from holding TPG Telecom or generate 3.47% return on investment over 90 days.

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

Abacus Storage King  vs.  TPG Telecom

Abacus Storage King

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Storage King are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Abacus Storage unveiled solid returns over the last few months and may actually be approaching a breakup point.

TPG Telecom

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TPG Telecom are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, TPG Telecom may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Abacus Storage and TPG Telecom

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

The idea behind Abacus Storage King and TPG Telecom 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.