Correlation Between Triad Group and Thyssenkrupp

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

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

Diversification Opportunities for Triad Group and Thyssenkrupp

0.82

Correlation Coefficient

Triad Group  Thyssenkrupp

Very poor diversification

The 3 months correlation between Triad and Thyssenkrupp is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Thyssenkrupp AG ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ON and Triad Group 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 Triad Group PLC are associated (or correlated) with Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ON has no effect on the direction of Triad Group i.e., Triad Group and Thyssenkrupp go up and down completely randomly.

Pair Corralation between Triad Group and Thyssenkrupp

Assuming the 90 days trading horizon Triad Group is expected to generate 2.33 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, Triad Group PLC is 1.94 times less risky than Thyssenkrupp. It trades about 0.29 of its potential returns per unit of risk. Thyssenkrupp AG ON is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  375.00  in Thyssenkrupp AG ON on December 1, 2024 and sell it today you would earn a total of  384.00  from holding Thyssenkrupp AG ON or generate 102.4% return on investment over 90 days.

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

Triad Group PLC  vs.  Thyssenkrupp AG ON

Triad Group PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Triad Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Thyssenkrupp AG ON

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Thyssenkrupp AG ON are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Thyssenkrupp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triad Group and Thyssenkrupp

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

The idea behind Triad Group PLC and Thyssenkrupp AG ON 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.