Correlation Between CaliberCos and Trinity Capital

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

By analyzing existing cross correlation between CaliberCos Class A and Trinity Capital, you can compare the effects of market volatilities on CaliberCos and Trinity Capital 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 CaliberCos with a short position of Trinity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CaliberCos and Trinity Capital.

Diversification Opportunities for CaliberCos and Trinity Capital

-0.09

Correlation Coefficient

CaliberCos  Trinity Capital

Good diversification

The 3 months correlation between CaliberCos and Trinity is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CaliberCos Class A and Trinity Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Capital and CaliberCos 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 CaliberCos Class A are associated (or correlated) with Trinity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Capital has no effect on the direction of CaliberCos i.e., CaliberCos and Trinity Capital go up and down completely randomly.

Pair Corralation between CaliberCos and Trinity Capital

Considering the 90-day investment horizon CaliberCos is expected to generate 3.89 times less return on investment than Trinity Capital. In addition to that, CaliberCos is 5.94 times more volatile than Trinity Capital. It trades about 0.01 of its total potential returns per unit of risk. Trinity Capital is currently generating about 0.15 per unit of volatility. If you would invest  1,329  in Trinity Capital on October 23, 2024 and sell it today you would earn a total of  132.00  from holding Trinity Capital or generate 9.93% return on investment over 90 days.

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

CaliberCos Class A  vs.  Trinity Capital

CaliberCos Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CaliberCos Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CaliberCos is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Trinity Capital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Trinity Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CaliberCos and Trinity Capital

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

The idea behind CaliberCos Class A and Trinity Capital 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.