Correlation Between Helium One and Trainline Plc

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

By analyzing existing cross correlation between Helium One Global and Trainline Plc, you can compare the effects of market volatilities on Helium One and Trainline Plc 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 Helium One with a short position of Trainline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helium One and Trainline Plc.

Diversification Opportunities for Helium One and Trainline Plc

-0.29

Correlation Coefficient

Helium One  Trainline Plc

Very good diversification

The 3 months correlation between Helium and Trainline is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Helium One Global and Trainline Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainline Plc and Helium One 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 Helium One Global are associated (or correlated) with Trainline Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainline Plc has no effect on the direction of Helium One i.e., Helium One and Trainline Plc go up and down completely randomly.

Pair Corralation between Helium One and Trainline Plc

Assuming the 90 days trading horizon Helium One Global is expected to generate 2.21 times more return on investment than Trainline Plc. However, Helium One is 2.21 times more volatile than Trainline Plc. It trades about 0.12 of its potential returns per unit of risk. Trainline Plc is currently generating about 0.06 per unit of risk. If you would invest  83.00  in Helium One Global on October 6, 2024 and sell it today you would earn a total of  15.00  from holding Helium One Global or generate 18.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Helium One Global  vs.  Trainline Plc

Helium One Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Trainline Plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trainline Plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Trainline Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helium One and Trainline Plc

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

The idea behind Helium One Global and Trainline Plc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.