Correlation Between India Globalization and Trinity Industries

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

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

Diversification Opportunities for India Globalization and Trinity Industries

-0.22

Correlation Coefficient

India Globalization  Trinity Industries

Very good diversification

The 3 months correlation between India and Trinity is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding India Globalization Capital and Trinity Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Industries and India Globalization 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 India Globalization Capital are associated (or correlated) with Trinity Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Industries has no effect on the direction of India Globalization i.e., India Globalization and Trinity Industries go up and down completely randomly.

Pair Corralation between India Globalization and Trinity Industries

Considering the 90-day investment horizon India Globalization is expected to generate 1.12 times less return on investment than Trinity Industries. In addition to that, India Globalization is 2.16 times more volatile than Trinity Industries. It trades about 0.02 of its total potential returns per unit of risk. Trinity Industries is currently generating about 0.04 per unit of volatility. If you would invest  2,589  in Trinity Industries on October 3, 2024 and sell it today you would earn a total of  921.00  from holding Trinity Industries or generate 35.57% return on investment over 90 days.

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

India Globalization Capital  vs.  Trinity Industries

India Globalization

Risk-Adjusted Performance

0 of 100

Very Weak

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

Trinity Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Trinity Industries may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with India Globalization and Trinity Industries

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

The idea behind India Globalization Capital and Trinity Industries 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.