Correlation Between All American and Trustcash Holdings

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

By analyzing existing cross correlation between All American Pet and Trustcash Holdings, you can compare the effects of market volatilities on All American and Trustcash Holdings 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 All American with a short position of Trustcash Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and Trustcash Holdings.

Diversification Opportunities for All American and Trustcash Holdings

0.0

Correlation Coefficient

All American  Trustcash Holdings

Pay attention - limited upside

The 3 months correlation between All and Trustcash is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding All American Pet and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash Holdings and All American 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 All American Pet are associated (or correlated) with Trustcash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustcash Holdings has no effect on the direction of All American i.e., All American and Trustcash Holdings go up and down completely randomly.

Pair Corralation between All American and Trustcash Holdings

Given the investment horizon of 90 days All American Pet is expected to under-perform the Trustcash Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, All American Pet is 10.24 times less risky than Trustcash Holdings. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Trustcash Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Trustcash Holdings on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Trustcash Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

All American Pet  vs.  Trustcash Holdings

All American Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Trustcash Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trustcash Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Trustcash Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with All American and Trustcash Holdings

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

The idea behind All American Pet and Trustcash Holdings 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.