Correlation Between ECN Capital and Trisura
Can any of the company-specific risk be diversified away by investing in both ECN Capital and Trisura 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 ECN Capital and Trisura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECN Capital Corp and Trisura Group, you can compare the effects of market volatilities on ECN Capital and Trisura 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 ECN Capital with a short position of Trisura. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECN Capital and Trisura.
Diversification Opportunities for ECN Capital and Trisura
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECN and Trisura is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and ECN Capital 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 ECN Capital Corp are associated (or correlated) with Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of ECN Capital i.e., ECN Capital and Trisura go up and down completely randomly.
Pair Corralation between ECN Capital and Trisura
Assuming the 90 days trading horizon ECN Capital Corp is expected to generate 2.35 times more return on investment than Trisura. However, ECN Capital is 2.35 times more volatile than Trisura Group. It trades about 0.15 of its potential returns per unit of risk. Trisura Group is currently generating about 0.0 per unit of risk. If you would invest 204.00 in ECN Capital Corp on September 12, 2024 and sell it today you would earn a total of 76.00 from holding ECN Capital Corp or generate 37.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ECN Capital Corp vs. Trisura Group
Performance |
Timeline |
ECN Capital Corp |
Trisura Group |
ECN Capital and Trisura Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECN Capital and Trisura
The main advantage of trading using opposite ECN Capital and Trisura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECN Capital position performs unexpectedly, Trisura 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 Trisura will offset losses from the drop in Trisura's long position.ECN Capital vs. Brompton Lifeco Split | ECN Capital vs. North American Financial | ECN Capital vs. Prime Dividend Corp | ECN Capital vs. Financial 15 Split |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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