Correlation Between Trinity Biotech and Enzo Biochem

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

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

Diversification Opportunities for Trinity Biotech and Enzo Biochem

0.47

Correlation Coefficient

Trinity Biotech  Enzo Biochem

Very weak diversification

The 3 months correlation between Trinity and Enzo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Biotech plc and Enzo Biochem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzo Biochem and Trinity Biotech 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 Trinity Biotech plc are associated (or correlated) with Enzo Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzo Biochem has no effect on the direction of Trinity Biotech i.e., Trinity Biotech and Enzo Biochem go up and down completely randomly.

Pair Corralation between Trinity Biotech and Enzo Biochem

Given the investment horizon of 90 days Trinity Biotech plc is expected to generate 3.28 times more return on investment than Enzo Biochem. However, Trinity Biotech is 3.28 times more volatile than Enzo Biochem. It trades about 0.03 of its potential returns per unit of risk. Enzo Biochem is currently generating about -0.16 per unit of risk. If you would invest  81.00  in Trinity Biotech plc on December 25, 2024 and sell it today you would lose (10.00) from holding Trinity Biotech plc or give up 12.35% of portfolio value over 90 days.

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

Trinity Biotech plc  vs.  Enzo Biochem

Trinity Biotech plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Biotech plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Trinity Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Enzo Biochem

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enzo Biochem has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Trinity Biotech and Enzo Biochem

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

The idea behind Trinity Biotech plc and Enzo Biochem 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 CEOs Directory module to screen CEOs from public companies around the world.