Correlation Between TPT Global and Amplitech

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

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

Diversification Opportunities for TPT Global and Amplitech

-0.08

Correlation Coefficient

TPT Global  Amplitech

Good diversification

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

Pair Corralation between TPT Global and Amplitech

Given the investment horizon of 90 days TPT Global Tech is expected to generate 4.27 times more return on investment than Amplitech. However, TPT Global is 4.27 times more volatile than Amplitech Group. It trades about 0.13 of its potential returns per unit of risk. Amplitech Group is currently generating about 0.06 per unit of risk. If you would invest  0.01  in TPT Global Tech on September 12, 2024 and sell it today you would earn a total of  0.00  from holding TPT Global Tech or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

TPT Global Tech  vs.  Amplitech Group

TPT Global Tech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TPT Global Tech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, TPT Global showed solid returns over the last few months and may actually be approaching a breakup point.

Amplitech Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplitech Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Amplitech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TPT Global and Amplitech

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

The idea behind TPT Global Tech and Amplitech Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.