Correlation Between Triad Group and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both Triad Group and Oxford Technology 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 Oxford Technology 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 Oxford Technology 2, you can compare the effects of market volatilities on Triad Group and Oxford Technology 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 Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Oxford Technology.
Diversification Opportunities for Triad Group and Oxford Technology
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Triad and Oxford is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology 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 Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of Triad Group i.e., Triad Group and Oxford Technology go up and down completely randomly.
Pair Corralation between Triad Group and Oxford Technology
Assuming the 90 days trading horizon Triad Group PLC is expected to generate 1.15 times more return on investment than Oxford Technology. However, Triad Group is 1.15 times more volatile than Oxford Technology 2. It trades about 0.04 of its potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.2 per unit of risk. If you would invest 26,834 in Triad Group PLC on September 26, 2024 and sell it today you would earn a total of 1,166 from holding Triad Group PLC or generate 4.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Triad Group PLC vs. Oxford Technology 2
Performance |
Timeline |
Triad Group PLC |
Oxford Technology |
Triad Group and Oxford Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Triad Group and Oxford Technology
The main advantage of trading using opposite Triad Group and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group position performs unexpectedly, Oxford Technology 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.Triad Group vs. Chocoladefabriken Lindt Spruengli | Triad Group vs. Rockwood Realisation PLC | Triad Group vs. Toyota Motor Corp | Triad Group vs. Johnson Matthey PLC |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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