Correlation Between Cardano and Performance Trust

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

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

Diversification Opportunities for Cardano and Performance Trust

-0.4

Correlation Coefficient

Cardano  Performance Trust

Very good diversification

The 3 months correlation between Cardano and Performance is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Performance Trust Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust and Cardano 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 Cardano are associated (or correlated) with Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Cardano i.e., Cardano and Performance Trust go up and down completely randomly.

Pair Corralation between Cardano and Performance Trust

Assuming the 90 days trading horizon Cardano is expected to under-perform the Performance Trust. In addition to that, Cardano is 28.48 times more volatile than Performance Trust Municipal. It trades about -0.02 of its total potential returns per unit of risk. Performance Trust Municipal is currently generating about -0.01 per unit of volatility. If you would invest  2,256  in Performance Trust Municipal on December 23, 2024 and sell it today you would lose (6.00) from holding Performance Trust Municipal or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.85%
Values	Daily Returns

Cardano  vs.  Performance Trust Municipal

Cardano

Risk-Adjusted Performance

Very Weak

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

Performance Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Performance Trust Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and Performance Trust

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

The idea behind Cardano and Performance Trust Municipal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .