Correlation Between Trio Tech and BHCCN

Can any of the company-specific risk be diversified away by investing in both Trio Tech and BHCCN 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 BHCCN 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 BHCCN 14 15 OCT 30, you can compare the effects of market volatilities on Trio Tech and BHCCN 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 BHCCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Tech and BHCCN.

Diversification Opportunities for Trio Tech and BHCCN

0.63

Correlation Coefficient

Trio Tech  BHCCN

Poor diversification

The 3 months correlation between Trio and BHCCN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and BHCCN 14 15 OCT 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHCCN 14 15 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 BHCCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHCCN 14 15 has no effect on the direction of Trio Tech i.e., Trio Tech and BHCCN go up and down completely randomly.

Pair Corralation between Trio Tech and BHCCN

Considering the 90-day investment horizon Trio Tech is expected to generate 1.07 times less return on investment than BHCCN. In addition to that, Trio Tech is 1.41 times more volatile than BHCCN 14 15 OCT 30. It trades about 0.04 of its total potential returns per unit of risk. BHCCN 14 15 OCT 30 is currently generating about 0.06 per unit of volatility. If you would invest  5,944  in BHCCN 14 15 OCT 30 on September 23, 2024 and sell it today you would earn a total of  1,924  from holding BHCCN 14 15 OCT 30 or generate 32.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	52.22%
Values	Daily Returns

Trio Tech International  vs.  BHCCN 14 15 OCT 30

Trio Tech International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 6 (%) 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.

BHCCN 14 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BHCCN 14 15 OCT 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BHCCN 14 15 OCT 30 investors.

Pair Trading with Trio Tech and BHCCN

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

The idea behind Trio Tech International and BHCCN 14 15 OCT 30 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.