Correlation Between Trustcash Holdings and International Consolidated

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

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

Diversification Opportunities for Trustcash Holdings and International Consolidated

0.6

Correlation Coefficient

Trustcash Holdings  International Consolidated

Poor diversification

The 3 months correlation between Trustcash and International is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Trustcash Holdings and International Consolidated Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Trustcash Holdings 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 Trustcash Holdings are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Trustcash Holdings i.e., Trustcash Holdings and International Consolidated go up and down completely randomly.

Pair Corralation between Trustcash Holdings and International Consolidated

Given the investment horizon of 90 days Trustcash Holdings is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Trustcash Holdings is 58.93 times less risky than International Consolidated. The stock trades about -0.05 of its potential returns per unit of risk. The International Consolidated Companies is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  40.00  in International Consolidated Companies on September 29, 2024 and sell it today you would lose (37.50) from holding International Consolidated Companies or give up 93.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Trustcash Holdings  vs.  International Consolidated Com

Trustcash Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trustcash Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

International Consolidated

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Companies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trustcash Holdings and International Consolidated

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

The idea behind Trustcash Holdings and International Consolidated Companies 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.