Correlation Between Trellidor Holdings and Copper 360

Can any of the company-specific risk be diversified away by investing in both Trellidor Holdings and Copper 360 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 Trellidor Holdings and Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trellidor Holdings and Copper 360, you can compare the effects of market volatilities on Trellidor Holdings and Copper 360 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 Trellidor Holdings with a short position of Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellidor Holdings and Copper 360.

Diversification Opportunities for Trellidor Holdings and Copper 360

0.74

Correlation Coefficient

Trellidor Holdings  Copper 360

Poor diversification

The 3 months correlation between Trellidor and Copper is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Trellidor Holdings and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 and Trellidor Holdings 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 Trellidor Holdings are associated (or correlated) with Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Trellidor Holdings i.e., Trellidor Holdings and Copper 360 go up and down completely randomly.

Pair Corralation between Trellidor Holdings and Copper 360

Assuming the 90 days trading horizon Trellidor Holdings is expected to generate 0.72 times more return on investment than Copper 360. However, Trellidor Holdings is 1.39 times less risky than Copper 360. It trades about -0.1 of its potential returns per unit of risk. Copper 360 is currently generating about -0.22 per unit of risk. If you would invest  18,300  in Trellidor Holdings on October 26, 2024 and sell it today you would lose (2,800) from holding Trellidor Holdings or give up 15.3% of portfolio value over 90 days.

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

Trellidor Holdings  vs.  Copper 360

Trellidor Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trellidor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Copper 360

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper 360 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trellidor Holdings and Copper 360

The main advantage of trading using opposite Trellidor Holdings and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellidor Holdings position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.

The idea behind Trellidor Holdings and Copper 360 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.