Correlation Between Trio Tech and Good Life

Can any of the company-specific risk be diversified away by investing in both Trio Tech and Good Life 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 Good Life 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 Good Life China, you can compare the effects of market volatilities on Trio Tech and Good Life 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 Good Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Tech and Good Life.

Diversification Opportunities for Trio Tech and Good Life

0.0

Correlation Coefficient

Trio Tech  Good Life

Pay attention - limited upside

The 3 months correlation between Trio and Good is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and Good Life China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Life China 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 Good Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Life China has no effect on the direction of Trio Tech i.e., Trio Tech and Good Life go up and down completely randomly.

Pair Corralation between Trio Tech and Good Life

Considering the 90-day investment horizon Trio Tech International is expected to generate 0.74 times more return on investment than Good Life. However, Trio Tech International is 1.35 times less risky than Good Life. It trades about 0.03 of its potential returns per unit of risk. Good Life China is currently generating about -0.04 per unit of risk. If you would invest  469.00  in Trio Tech International on October 10, 2024 and sell it today you would earn a total of  132.00  from holding Trio Tech International or generate 28.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Trio Tech International  vs.  Good Life China

Trio Tech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Tech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Good Life China

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Trio Tech and Good Life

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

The idea behind Trio Tech International and Good Life China 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.