Correlation Between Teka Construction and CPN Retail

Can any of the company-specific risk be diversified away by investing in both Teka Construction and CPN Retail 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 Teka Construction and CPN Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teka Construction PCL and CPN Retail Growth, you can compare the effects of market volatilities on Teka Construction and CPN Retail 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 Teka Construction with a short position of CPN Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teka Construction and CPN Retail.

Diversification Opportunities for Teka Construction and CPN Retail

0.16

Correlation Coefficient

Teka Construction  CPN Retail

Average diversification

The 3 months correlation between Teka and CPN is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Teka Construction PCL and CPN Retail Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPN Retail Growth and Teka Construction 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 Teka Construction PCL are associated (or correlated) with CPN Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPN Retail Growth has no effect on the direction of Teka Construction i.e., Teka Construction and CPN Retail go up and down completely randomly.

Pair Corralation between Teka Construction and CPN Retail

Assuming the 90 days trading horizon Teka Construction PCL is expected to under-perform the CPN Retail. But the stock apears to be less risky and, when comparing its historical volatility, Teka Construction PCL is 1.29 times less risky than CPN Retail. The stock trades about -0.07 of its potential returns per unit of risk. The CPN Retail Growth is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,166  in CPN Retail Growth on April 25, 2025 and sell it today you would lose (6.00) from holding CPN Retail Growth or give up 0.51% of portfolio value over 90 days.

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

Teka Construction PCL  vs.  CPN Retail Growth

Teka Construction PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teka Construction PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Teka Construction is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

CPN Retail Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days CPN Retail Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CPN Retail is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Teka Construction and CPN Retail

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

The idea behind Teka Construction PCL and CPN Retail Growth 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.