Correlation Between Frontera and Trustcash Holdings

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

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

Diversification Opportunities for Frontera and Trustcash Holdings

0.0

Correlation Coefficient

Frontera  Trustcash Holdings

Pay attention - limited upside

The 3 months correlation between Frontera and Trustcash is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Group and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash Holdings and Frontera 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 Frontera Group 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 Frontera i.e., Frontera and Trustcash Holdings go up and down completely randomly.

Pair Corralation between Frontera and Trustcash Holdings

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

Frontera Group  vs.  Trustcash Holdings

Frontera Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontera Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Frontera is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Frontera and Trustcash Holdings

The main advantage of trading using opposite Frontera and Trustcash Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera 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 Frontera Group 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.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.