Correlation Between Trio Tech and 26441CBU8

Can any of the company-specific risk be diversified away by investing in both Trio Tech and 26441CBU8 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 26441CBU8 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 DUK 5 15 AUG 52, you can compare the effects of market volatilities on Trio Tech and 26441CBU8 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 26441CBU8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Tech and 26441CBU8.

Diversification Opportunities for Trio Tech and 26441CBU8

0.52

Correlation Coefficient

Trio Tech  26441CBU8

Very weak diversification

The 3 months correlation between Trio and 26441CBU8 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and DUK 5 15 AUG 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 26441CBU8 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 26441CBU8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 26441CBU8 has no effect on the direction of Trio Tech i.e., Trio Tech and 26441CBU8 go up and down completely randomly.

Pair Corralation between Trio Tech and 26441CBU8

Considering the 90-day investment horizon Trio Tech International is expected to under-perform the 26441CBU8. In addition to that, Trio Tech is 1.35 times more volatile than DUK 5 15 AUG 52. It trades about -0.19 of its total potential returns per unit of risk. DUK 5 15 AUG 52 is currently generating about -0.16 per unit of volatility. If you would invest  9,175  in DUK 5 15 AUG 52 on October 11, 2024 and sell it today you would lose (472.00) from holding DUK 5 15 AUG 52 or give up 5.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Trio Tech International  vs.  DUK 5 15 AUG 52

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.

26441CBU8

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 5 15 AUG 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUK 5 15 AUG 52 investors.

Pair Trading with Trio Tech and 26441CBU8

The main advantage of trading using opposite Trio Tech and 26441CBU8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Tech position performs unexpectedly, 26441CBU8 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 26441CBU8 will offset losses from the drop in 26441CBU8's long position.

The idea behind Trio Tech International and DUK 5 15 AUG 52 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.