Correlation Between TPT Global and Digital Brand

Can any of the company-specific risk be diversified away by investing in both TPT Global and Digital Brand 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 Digital Brand 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 Digital Brand Media, you can compare the effects of market volatilities on TPT Global and Digital Brand 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 Digital Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPT Global and Digital Brand.

Diversification Opportunities for TPT Global and Digital Brand

-0.06

Correlation Coefficient

TPT Global  Digital Brand

Good diversification

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

Pair Corralation between TPT Global and Digital Brand

Given the investment horizon of 90 days TPT Global Tech is expected to generate 31.72 times more return on investment than Digital Brand. However, TPT Global is 31.72 times more volatile than Digital Brand Media. It trades about 0.38 of its potential returns per unit of risk. Digital Brand Media is currently generating about 0.02 per unit of risk. If you would invest  0.01  in TPT Global Tech on May 17, 2025 and sell it today you would lose (0.01) from holding TPT Global Tech or give up 100.0% of portfolio value over 90 days.

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

TPT Global Tech  vs.  Digital Brand Media

TPT Global Tech

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TPT Global Tech are ranked lower than 29 (%) 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.

Digital Brand Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Brand Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Digital Brand displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TPT Global and Digital Brand

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

The idea behind TPT Global Tech and Digital Brand Media 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.