Correlation Between Sysco and Trupanion

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

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

Diversification Opportunities for Sysco and Trupanion

0.14

Correlation Coefficient

Sysco  Trupanion

Average diversification

The 3 months correlation between Sysco and Trupanion is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sysco and Trupanion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trupanion and Sysco 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 Sysco are associated (or correlated) with Trupanion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trupanion has no effect on the direction of Sysco i.e., Sysco and Trupanion go up and down completely randomly.

Pair Corralation between Sysco and Trupanion

Considering the 90-day investment horizon Sysco is expected to generate 0.33 times more return on investment than Trupanion. However, Sysco is 3.03 times less risky than Trupanion. It trades about -0.08 of its potential returns per unit of risk. Trupanion is currently generating about -0.09 per unit of risk. If you would invest  7,637  in Sysco on December 21, 2024 and sell it today you would lose (526.00) from holding Sysco or give up 6.89% of portfolio value over 90 days.

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

Sysco  vs.  Trupanion

Sysco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Trupanion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trupanion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sysco and Trupanion

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

The idea behind Sysco and Trupanion 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.