Correlation Between Trimax Corp and Xtra Energy

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

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

Diversification Opportunities for Trimax Corp and Xtra Energy

-0.48

Correlation Coefficient

Trimax Corp  Xtra Energy

Very good diversification

The 3 months correlation between Trimax and Xtra is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trimax Corp and Xtra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtra Energy Corp and Trimax Corp 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 Trimax Corp are associated (or correlated) with Xtra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtra Energy Corp has no effect on the direction of Trimax Corp i.e., Trimax Corp and Xtra Energy go up and down completely randomly.

Pair Corralation between Trimax Corp and Xtra Energy

Given the investment horizon of 90 days Trimax Corp is expected to under-perform the Xtra Energy. In addition to that, Trimax Corp is 1.56 times more volatile than Xtra Energy Corp. It trades about -0.12 of its total potential returns per unit of risk. Xtra Energy Corp is currently generating about 0.26 per unit of volatility. If you would invest  16.00  in Xtra Energy Corp on September 18, 2024 and sell it today you would earn a total of  6.00  from holding Xtra Energy Corp or generate 37.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Trimax Corp  vs.  Xtra Energy Corp

Trimax Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trimax Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Trimax Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Xtra Energy Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtra Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Xtra Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trimax Corp and Xtra Energy

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

The idea behind Trimax Corp and Xtra Energy Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.