Correlation Between Intuit and TrustBIX

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

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

Diversification Opportunities for Intuit and TrustBIX

0.75

Correlation Coefficient

Intuit  TrustBIX

Poor diversification

The 3 months correlation between Intuit and TrustBIX is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and TrustBIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrustBIX and Intuit 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 Intuit Inc are associated (or correlated) with TrustBIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrustBIX has no effect on the direction of Intuit i.e., Intuit and TrustBIX go up and down completely randomly.

Pair Corralation between Intuit and TrustBIX

Given the investment horizon of 90 days Intuit Inc is expected to under-perform the TrustBIX. But the stock apears to be less risky and, when comparing its historical volatility, Intuit Inc is 6.66 times less risky than TrustBIX. The stock trades about -0.03 of its potential returns per unit of risk. The TrustBIX is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.95  in TrustBIX on December 23, 2024 and sell it today you would lose (2.18) from holding TrustBIX or give up 55.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.85%
Values	Daily Returns

Intuit Inc  vs.  TrustBIX

Intuit Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

TrustBIX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TrustBIX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TrustBIX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuit and TrustBIX

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

The idea behind Intuit Inc and TrustBIX 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .