Correlation Between Topbuild Corp and Founder Group

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

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

Diversification Opportunities for Topbuild Corp and Founder Group

0.16

Correlation Coefficient

Topbuild Corp  Founder Group

Average diversification

The 3 months correlation between Topbuild and Founder is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Topbuild Corp and Founder Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Founder Group Limited and Topbuild Corp 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 Topbuild Corp are associated (or correlated) with Founder Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Founder Group Limited has no effect on the direction of Topbuild Corp i.e., Topbuild Corp and Founder Group go up and down completely randomly.

Pair Corralation between Topbuild Corp and Founder Group

Considering the 90-day investment horizon Topbuild Corp is expected to generate 0.39 times more return on investment than Founder Group. However, Topbuild Corp is 2.58 times less risky than Founder Group. It trades about 0.28 of its potential returns per unit of risk. Founder Group Limited is currently generating about 0.03 per unit of risk. If you would invest  29,550  in Topbuild Corp on May 17, 2025 and sell it today you would earn a total of  14,139  from holding Topbuild Corp or generate 47.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Topbuild Corp  vs.  Founder Group Limited

Topbuild Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Topbuild Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Topbuild Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Founder Group Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Founder Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Founder Group may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Topbuild Corp and Founder Group

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

The idea behind Topbuild Corp and Founder Group Limited 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.