Correlation Between Trellus Health and Triad Group

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

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

Diversification Opportunities for Trellus Health and Triad Group

-0.12

Correlation Coefficient

Trellus Health  Triad Group

Good diversification

The 3 months correlation between Trellus and Triad is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group PLC and Trellus Health 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 Trellus Health plc are associated (or correlated) with Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of Trellus Health i.e., Trellus Health and Triad Group go up and down completely randomly.

Pair Corralation between Trellus Health and Triad Group

Assuming the 90 days trading horizon Trellus Health plc is expected to under-perform the Triad Group. In addition to that, Trellus Health is 2.21 times more volatile than Triad Group PLC. It trades about -0.11 of its total potential returns per unit of risk. Triad Group PLC is currently generating about 0.12 per unit of volatility. If you would invest  12,080  in Triad Group PLC on October 5, 2024 and sell it today you would earn a total of  15,420  from holding Triad Group PLC or generate 127.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Trellus Health plc  vs.  Triad Group PLC

Trellus Health plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trellus Health plc 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Triad Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triad Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Triad Group is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Trellus Health and Triad Group

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

The idea behind Trellus Health plc and Triad Group PLC 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.