Correlation Between Trxade and High Tide

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

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

Diversification Opportunities for Trxade and High Tide

-0.64

Correlation Coefficient

Trxade  High Tide

Excellent diversification

The 3 months correlation between Trxade and High is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide and Trxade 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 Trxade Group are associated (or correlated) with High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Trxade i.e., Trxade and High Tide go up and down completely randomly.

Pair Corralation between Trxade and High Tide

Given the investment horizon of 90 days Trxade is expected to generate 4.34 times less return on investment than High Tide. In addition to that, Trxade is 1.06 times more volatile than High Tide. It trades about 0.05 of its total potential returns per unit of risk. High Tide is currently generating about 0.23 per unit of volatility. If you would invest  205.00  in High Tide on September 4, 2024 and sell it today you would earn a total of  143.00  from holding High Tide or generate 69.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	30.16%
Values	Daily Returns

Trxade Group  vs.  High Tide

Trxade Group

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain fundamental indicators, Trxade unveiled solid returns over the last few months and may actually be approaching a breakup point.

High Tide

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in High Tide are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, High Tide demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trxade and High Tide

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

The idea behind Trxade Group and High Tide 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.