Correlation Between Video River and TGI Solar

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

By analyzing existing cross correlation between Video River Networks and TGI Solar Power, you can compare the effects of market volatilities on Video River and TGI Solar 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 Video River with a short position of TGI Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Video River and TGI Solar.

Diversification Opportunities for Video River and TGI Solar

0.71

Correlation Coefficient

Video River  TGI Solar

Poor diversification

The 3 months correlation between Video and TGI is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Video River Networks and TGI Solar Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGI Solar Power and Video River 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 Video River Networks are associated (or correlated) with TGI Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGI Solar Power has no effect on the direction of Video River i.e., Video River and TGI Solar go up and down completely randomly.

Pair Corralation between Video River and TGI Solar

Given the investment horizon of 90 days Video River Networks is expected to generate 1.67 times more return on investment than TGI Solar. However, Video River is 1.67 times more volatile than TGI Solar Power. It trades about 0.15 of its potential returns per unit of risk. TGI Solar Power is currently generating about 0.04 per unit of risk. If you would invest  0.22  in Video River Networks on September 12, 2024 and sell it today you would earn a total of  0.08  from holding Video River Networks or generate 36.36% return on investment over 90 days.

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

Video River Networks  vs.  TGI Solar Power

Video River Networks

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

TGI Solar Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TGI Solar Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TGI Solar is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Video River and TGI Solar

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

The idea behind Video River Networks and TGI Solar 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.