Correlation Between TPI Composites and Aecom Technology

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

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

Diversification Opportunities for TPI Composites and Aecom Technology

-0.06

Correlation Coefficient

TPI Composites  Aecom Technology

Good diversification

The 3 months correlation between TPI and Aecom is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding TPI Composites and Aecom Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecom Technology and TPI Composites 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 TPI Composites are associated (or correlated) with Aecom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecom Technology has no effect on the direction of TPI Composites i.e., TPI Composites and Aecom Technology go up and down completely randomly.

Pair Corralation between TPI Composites and Aecom Technology

Given the investment horizon of 90 days TPI Composites is expected to under-perform the Aecom Technology. In addition to that, TPI Composites is 6.72 times more volatile than Aecom Technology. It trades about -0.03 of its total potential returns per unit of risk. Aecom Technology is currently generating about 0.18 per unit of volatility. If you would invest  10,212  in Aecom Technology on May 2, 2025 and sell it today you would earn a total of  1,062  from holding Aecom Technology or generate 10.4% return on investment over 90 days.

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

TPI Composites  vs.  Aecom Technology

TPI Composites

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPI Composites has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Aecom Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aecom Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Aecom Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TPI Composites and Aecom Technology

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

The idea behind TPI Composites and Aecom Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.