Correlation Between Augwind Energy and Tigi

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

By analyzing existing cross correlation between Augwind Energy Tech and Tigi, you can compare the effects of market volatilities on Augwind Energy and Tigi 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 Augwind Energy with a short position of Tigi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augwind Energy and Tigi.

Diversification Opportunities for Augwind Energy and Tigi

0.08

Correlation Coefficient

Augwind Energy  Tigi

Significant diversification

The 3 months correlation between Augwind and Tigi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Tigi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigi and Augwind Energy 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 Augwind Energy Tech are associated (or correlated) with Tigi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigi has no effect on the direction of Augwind Energy i.e., Augwind Energy and Tigi go up and down completely randomly.

Pair Corralation between Augwind Energy and Tigi

Assuming the 90 days trading horizon Augwind Energy Tech is expected to under-perform the Tigi. But the stock apears to be less risky and, when comparing its historical volatility, Augwind Energy Tech is 1.12 times less risky than Tigi. The stock trades about -0.02 of its potential returns per unit of risk. The Tigi is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  68,570  in Tigi on September 28, 2024 and sell it today you would earn a total of  14,080  from holding Tigi or generate 20.53% return on investment over 90 days.

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

Augwind Energy Tech  vs.  Tigi

Augwind Energy Tech

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Augwind Energy Tech are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Augwind Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Tigi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tigi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tigi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Augwind Energy and Tigi

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

The idea behind Augwind Energy Tech and Tigi 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 Anywhere module to track or share privately all of your investments from the convenience of any device.