Correlation Between Triple Point and Global Opportunities

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

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

Diversification Opportunities for Triple Point and Global Opportunities

-0.53

Correlation Coefficient

Triple Point  Global Opportunities

Excellent diversification

The 3 months correlation between Triple and Global is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Triple Point Venture and Global Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunities and Triple Point 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 Triple Point Venture are associated (or correlated) with Global Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunities has no effect on the direction of Triple Point i.e., Triple Point and Global Opportunities go up and down completely randomly.

Pair Corralation between Triple Point and Global Opportunities

Assuming the 90 days trading horizon Triple Point Venture is expected to generate 0.1 times more return on investment than Global Opportunities. However, Triple Point Venture is 9.91 times less risky than Global Opportunities. It trades about 0.13 of its potential returns per unit of risk. Global Opportunities Trust is currently generating about -0.05 per unit of risk. If you would invest  9,002  in Triple Point Venture on October 1, 2024 and sell it today you would earn a total of  98.00  from holding Triple Point Venture or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Triple Point Venture  vs.  Global Opportunities Trust

Triple Point Venture

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triple Point Venture are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Triple Point is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Opportunities Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Triple Point and Global Opportunities

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

The idea behind Triple Point Venture and Global Opportunities Trust 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.