Correlation Between Trellidor Holdings and Trematon Capital

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

By analyzing existing cross correlation between Trellidor Holdings and Trematon Capital Investments, you can compare the effects of market volatilities on Trellidor Holdings and Trematon Capital 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 Trematon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellidor Holdings and Trematon Capital.

Diversification Opportunities for Trellidor Holdings and Trematon Capital

-0.59

Correlation Coefficient

Trellidor Holdings  Trematon Capital

Excellent diversification

The 3 months correlation between Trellidor and Trematon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Trellidor Holdings and Trematon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trematon Capital Inv 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 Trematon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trematon Capital Inv has no effect on the direction of Trellidor Holdings i.e., Trellidor Holdings and Trematon Capital go up and down completely randomly.

Pair Corralation between Trellidor Holdings and Trematon Capital

Assuming the 90 days trading horizon Trellidor Holdings is expected to generate 1.57 times more return on investment than Trematon Capital. However, Trellidor Holdings is 1.57 times more volatile than Trematon Capital Investments. It trades about 0.07 of its potential returns per unit of risk. Trematon Capital Investments is currently generating about -0.09 per unit of risk. If you would invest  17,400  in Trellidor Holdings on December 24, 2024 and sell it today you would earn a total of  3,600  from holding Trellidor Holdings or generate 20.69% return on investment over 90 days.

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

Trellidor Holdings  vs.  Trematon Capital Investments

Trellidor Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trellidor Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Trellidor Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Trematon Capital Inv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trematon Capital Investments 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trellidor Holdings and Trematon Capital

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

The idea behind Trellidor Holdings and Trematon Capital Investments 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.