Correlation Between Trailblazer Merger and Sanyo Special

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

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

Diversification Opportunities for Trailblazer Merger and Sanyo Special

-0.51

Correlation Coefficient

Trailblazer Merger  Sanyo Special

Excellent diversification

The 3 months correlation between Trailblazer and Sanyo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Trailblazer Merger and Sanyo Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Special Steel and Trailblazer Merger 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 Trailblazer Merger are associated (or correlated) with Sanyo Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Special Steel has no effect on the direction of Trailblazer Merger i.e., Trailblazer Merger and Sanyo Special go up and down completely randomly.

Pair Corralation between Trailblazer Merger and Sanyo Special

Assuming the 90 days horizon Trailblazer Merger is expected to generate 4.27 times more return on investment than Sanyo Special. However, Trailblazer Merger is 4.27 times more volatile than Sanyo Special Steel. It trades about 0.05 of its potential returns per unit of risk. Sanyo Special Steel is currently generating about -0.13 per unit of risk. If you would invest  24.00  in Trailblazer Merger on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Trailblazer Merger or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Trailblazer Merger  vs.  Sanyo Special Steel

Trailblazer Merger

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trailblazer Merger are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Trailblazer Merger reported solid returns over the last few months and may actually be approaching a breakup point.

Sanyo Special Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sanyo Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Trailblazer Merger and Sanyo Special

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

The idea behind Trailblazer Merger and Sanyo Special Steel 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.