Correlation Between Trio Tech and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Trio Tech and Flexible Solutions 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 Trio Tech and Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trio Tech International and Flexible Solutions International, you can compare the effects of market volatilities on Trio Tech and Flexible Solutions 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 Trio Tech with a short position of Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Tech and Flexible Solutions.
Diversification Opportunities for Trio Tech and Flexible Solutions
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trio and Flexible is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions and Trio Tech 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 Trio Tech International are associated (or correlated) with Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Trio Tech i.e., Trio Tech and Flexible Solutions go up and down completely randomly.
Pair Corralation between Trio Tech and Flexible Solutions
Considering the 90-day investment horizon Trio Tech International is expected to generate 1.0 times more return on investment than Flexible Solutions. However, Trio Tech is 1.0 times more volatile than Flexible Solutions International. It trades about 0.03 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.03 per unit of risk. If you would invest 468.00 in Trio Tech International on October 11, 2024 and sell it today you would earn a total of 133.00 from holding Trio Tech International or generate 28.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Trio Tech International vs. Flexible Solutions Internation
Performance |
Timeline |
Trio Tech International |
Flexible Solutions |
Trio Tech and Flexible Solutions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trio Tech and Flexible Solutions
The main advantage of trading using opposite Trio Tech and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Tech position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.Trio Tech vs. Aehr Test Systems | Trio Tech vs. Camtek | Trio Tech vs. Nova | Trio Tech vs. Axcelis Technologies |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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