Correlation Between Suntrust Home and Top Frontier

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

By analyzing existing cross correlation between Suntrust Home Developers and Top Frontier Investment, you can compare the effects of market volatilities on Suntrust Home and Top Frontier 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 Suntrust Home with a short position of Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Top Frontier.

Diversification Opportunities for Suntrust Home and Top Frontier

0.0

Correlation Coefficient

Suntrust Home  Top Frontier

Pay attention - limited upside

The 3 months correlation between Suntrust and Top is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment and Suntrust Home 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 Suntrust Home Developers are associated (or correlated) with Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of Suntrust Home i.e., Suntrust Home and Top Frontier go up and down completely randomly.

Pair Corralation between Suntrust Home and Top Frontier

Assuming the 90 days trading horizon Suntrust Home Developers is expected to under-perform the Top Frontier. In addition to that, Suntrust Home is 1.26 times more volatile than Top Frontier Investment. It trades about -0.08 of its total potential returns per unit of risk. Top Frontier Investment is currently generating about -0.01 per unit of volatility. If you would invest  6,310  in Top Frontier Investment on December 31, 2024 and sell it today you would lose (310.00) from holding Top Frontier Investment or give up 4.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	84.48%
Values	Daily Returns

Suntrust Home Developers  vs.  Top Frontier Investment

Suntrust Home Developers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suntrust Home Developers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Top Frontier Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Suntrust Home and Top Frontier

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

The idea behind Suntrust Home Developers and Top Frontier Investment 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.