Correlation Between Flexium Interconnect and TPK Holding

Can any of the company-specific risk be diversified away by investing in both Flexium Interconnect and TPK Holding 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 Flexium Interconnect and TPK Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flexium Interconnect and TPK Holding Co, you can compare the effects of market volatilities on Flexium Interconnect and TPK Holding 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 Flexium Interconnect with a short position of TPK Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexium Interconnect and TPK Holding.

Diversification Opportunities for Flexium Interconnect and TPK Holding

0.84

Correlation Coefficient

Flexium Interconnect  TPK Holding

Very poor diversification

The 3 months correlation between Flexium and TPK is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and TPK Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPK Holding and Flexium Interconnect 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 Flexium Interconnect are associated (or correlated) with TPK Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPK Holding has no effect on the direction of Flexium Interconnect i.e., Flexium Interconnect and TPK Holding go up and down completely randomly.

Pair Corralation between Flexium Interconnect and TPK Holding

Assuming the 90 days trading horizon Flexium Interconnect is expected to under-perform the TPK Holding. But the stock apears to be less risky and, when comparing its historical volatility, Flexium Interconnect is 1.37 times less risky than TPK Holding. The stock trades about -0.21 of its potential returns per unit of risk. The TPK Holding Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  4,480  in TPK Holding Co on September 13, 2024 and sell it today you would lose (510.00) from holding TPK Holding Co or give up 11.38% of portfolio value over 90 days.

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

Flexium Interconnect  vs.  TPK Holding Co

Flexium Interconnect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flexium Interconnect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

TPK Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TPK Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Flexium Interconnect and TPK Holding

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

The idea behind Flexium Interconnect and TPK Holding Co 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.