Correlation Between Trio Tech and SS Innovations

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

Diversification Opportunities for Trio Tech and SS Innovations

-0.33

Correlation Coefficient

Trio Tech  SS Innovations

Very good diversification

The 3 months correlation between Trio and SSII is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and SS Innovations International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Innovations Inter 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 SS Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Innovations Inter has no effect on the direction of Trio Tech i.e., Trio Tech and SS Innovations go up and down completely randomly.

Pair Corralation between Trio Tech and SS Innovations

Considering the 90-day investment horizon Trio Tech International is expected to under-perform the SS Innovations. But the stock apears to be less risky and, when comparing its historical volatility, Trio Tech International is 4.42 times less risky than SS Innovations. The stock trades about -0.26 of its potential returns per unit of risk. The SS Innovations International is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  370.00  in SS Innovations International on September 29, 2024 and sell it today you would earn a total of  430.00  from holding SS Innovations International or generate 116.22% return on investment over 90 days.

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

Trio Tech International  vs.  SS Innovations International

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.

SS Innovations Inter

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SS Innovations International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, SS Innovations demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trio Tech and SS Innovations

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

The idea behind Trio Tech International and SS Innovations International 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.