Correlation Between TPI POLENE and MBK Public

Can any of the company-specific risk be diversified away by investing in both TPI POLENE and MBK Public 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 TPI POLENE and MBK Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TPI POLENE POWER and MBK Public, you can compare the effects of market volatilities on TPI POLENE and MBK Public 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 TPI POLENE with a short position of MBK Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI POLENE and MBK Public.

Diversification Opportunities for TPI POLENE and MBK Public

-0.35

Correlation Coefficient

TPI POLENE  MBK Public

Very good diversification

The 3 months correlation between TPI and MBK is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding TPI POLENE POWER and MBK Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBK Public and TPI POLENE 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 TPI POLENE POWER are associated (or correlated) with MBK Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBK Public has no effect on the direction of TPI POLENE i.e., TPI POLENE and MBK Public go up and down completely randomly.

Pair Corralation between TPI POLENE and MBK Public

Assuming the 90 days trading horizon TPI POLENE POWER is expected to under-perform the MBK Public. But the stock apears to be less risky and, when comparing its historical volatility, TPI POLENE POWER is 1.78 times less risky than MBK Public. The stock trades about -0.03 of its potential returns per unit of risk. The MBK Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,590  in MBK Public on April 23, 2025 and sell it today you would earn a total of  70.00  from holding MBK Public or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

TPI POLENE POWER  vs.  MBK Public

TPI POLENE POWER

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPI POLENE POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, TPI POLENE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

MBK Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MBK Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, MBK Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TPI POLENE and MBK Public

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

The idea behind TPI POLENE POWER and MBK Public 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.