Correlation Between Trupanion and Trisura Group

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

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

Diversification Opportunities for Trupanion and Trisura Group

-0.23

Correlation Coefficient

Trupanion  Trisura Group

Very good diversification

The 3 months correlation between Trupanion and Trisura is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and Trupanion 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 Trupanion are associated (or correlated) with Trisura Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of Trupanion i.e., Trupanion and Trisura Group go up and down completely randomly.

Pair Corralation between Trupanion and Trisura Group

Assuming the 90 days horizon Trupanion is expected to under-perform the Trisura Group. In addition to that, Trupanion is 1.37 times more volatile than Trisura Group. It trades about -0.38 of its total potential returns per unit of risk. Trisura Group is currently generating about -0.27 per unit of volatility. If you would invest  2,680  in Trisura Group on October 11, 2024 and sell it today you would lose (220.00) from holding Trisura Group or give up 8.21% of portfolio value over 90 days.

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

Trupanion  vs.  Trisura Group

Trupanion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trupanion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Trupanion may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Trisura Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trisura Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Trupanion and Trisura Group

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

The idea behind Trupanion and Trisura Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.