Correlation Between International Consolidated and Trustcash Holdings

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

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

Diversification Opportunities for International Consolidated and Trustcash Holdings

0.63

Correlation Coefficient

International Consolidated  Trustcash Holdings

Poor diversification

The 3 months correlation between International and Trustcash is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Com and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash Holdings and International Consolidated 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 International Consolidated Companies 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 International Consolidated i.e., International Consolidated and Trustcash Holdings go up and down completely randomly.

Pair Corralation between International Consolidated and Trustcash Holdings

Given the investment horizon of 90 days International Consolidated is expected to generate 1.91 times less return on investment than Trustcash Holdings. But when comparing it to its historical volatility, International Consolidated Companies is 2.27 times less risky than Trustcash Holdings. It trades about 0.26 of its potential returns per unit of risk. Trustcash Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. 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	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

International Consolidated Com  vs.  Trustcash Holdings

International Consolidated

Risk-Adjusted Performance

15 of 100

Solid

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

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 International Consolidated and Trustcash Holdings

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