Is it possible to create a custom tooltip with no border using wx.TipWindow. I can do this with PopupTransientWindow but I could not figure out the which event to use to dismiss the popup when the mouse is moved away from a given rectangle bound(not clicked but moved away).
You may not be able to customize that particular control very well as it wraps the native widget (if it exists). Instead, I would recommend switching to BalloonTip or possibly better, the SuperToolTip. Both of these controls are generic, pure Python controls. That means that they usually have additional customization and they are definitely easier to modify yourself if you need to because they're Python instead of C++.
There are demos of both of those controls in the wxPython demo package. You should check them out and see if they work better for you.
Tooltip without border in wxpython