Correlation Between Global Power and TPI Polene

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Can any of the company-specific risk be diversified away by investing in both Global Power and TPI Polene 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 Global Power and TPI Polene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Power Synergy and TPI Polene Power, you can compare the effects of market volatilities on Global Power and TPI Polene 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 Global Power with a short position of TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Power and TPI Polene.

Diversification Opportunities for Global Power and TPI Polene

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Global and TPI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global Power Synergy and TPI Polene Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene Power and Global Power 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 Global Power Synergy are associated (or correlated) with TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Power has no effect on the direction of Global Power i.e., Global Power and TPI Polene go up and down completely randomly.

Pair Corralation between Global Power and TPI Polene

Assuming the 90 days trading horizon Global Power is expected to generate 1.23 times less return on investment than TPI Polene. In addition to that, Global Power is 1.73 times more volatile than TPI Polene Power. It trades about 0.03 of its total potential returns per unit of risk. TPI Polene Power is currently generating about 0.07 per unit of volatility. If you would invest  214.00  in TPI Polene Power on April 23, 2025 and sell it today you would earn a total of  12.00  from holding TPI Polene Power or generate 5.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Global Power Synergy  vs.  TPI Polene Power

 Performance 
       Timeline  
Global Power Synergy 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global Power Synergy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Global Power is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
TPI Polene Power 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TPI Polene Power are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, TPI Polene may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Global Power and TPI Polene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global Power and TPI Polene

The main advantage of trading using opposite Global Power and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Power position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene's long position.
The idea behind Global Power Synergy and TPI Polene Power 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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