Correlation Between Trio Tech and Rubicon Technologies

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

Diversification Opportunities for Trio Tech and Rubicon Technologies

-0.22

Correlation Coefficient

Trio Tech  Rubicon Technologies

Very good diversification

The 3 months correlation between Trio and Rubicon is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and Rubicon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technologies 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 Rubicon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technologies has no effect on the direction of Trio Tech i.e., Trio Tech and Rubicon Technologies go up and down completely randomly.

Pair Corralation between Trio Tech and Rubicon Technologies

Considering the 90-day investment horizon Trio Tech International is expected to generate 0.31 times more return on investment than Rubicon Technologies. However, Trio Tech International is 3.25 times less risky than Rubicon Technologies. It trades about 0.01 of its potential returns per unit of risk. Rubicon Technologies is currently generating about -0.08 per unit of risk. If you would invest  676.00  in Trio Tech International on September 28, 2024 and sell it today you would lose (85.00) from holding Trio Tech International or give up 12.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.3%
Values	Daily Returns

Trio Tech International  vs.  Rubicon Technologies

Trio Tech International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Trio Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rubicon Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Rubicon Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Trio Tech and Rubicon Technologies

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

The idea behind Trio Tech International and Rubicon Technologies 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.