Correlation Between Tigi and Apollo Power

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

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

Diversification Opportunities for Tigi and Apollo Power

0.32

Correlation Coefficient

Tigi  Apollo Power

Weak diversification

The 3 months correlation between Tigi and Apollo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tigi and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power and Tigi 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 Tigi are associated (or correlated) with Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of Tigi i.e., Tigi and Apollo Power go up and down completely randomly.

Pair Corralation between Tigi and Apollo Power

Assuming the 90 days trading horizon Tigi is expected to generate 1.66 times more return on investment than Apollo Power. However, Tigi is 1.66 times more volatile than Apollo Power. It trades about 0.08 of its potential returns per unit of risk. Apollo Power is currently generating about -0.01 per unit of risk. If you would invest  35,860  in Tigi on September 14, 2024 and sell it today you would earn a total of  42,920  from holding Tigi or generate 119.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.52%
Values	Daily Returns

Tigi  vs.  Apollo Power

Tigi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tigi are ranked lower than 10 (%) 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.

Apollo Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tigi and Apollo Power

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

The idea behind Tigi and Apollo 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.