Correlation Between TRV Rubber and Major Cineplex

Can any of the company-specific risk be diversified away by investing in both TRV Rubber and Major Cineplex 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 TRV Rubber and Major Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRV Rubber Products and Major Cineplex Group, you can compare the effects of market volatilities on TRV Rubber and Major Cineplex 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 TRV Rubber with a short position of Major Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRV Rubber and Major Cineplex.

Diversification Opportunities for TRV Rubber and Major Cineplex

0.94

Correlation Coefficient

TRV Rubber  Major Cineplex

Almost no diversification

The 3 months correlation between TRV and Major is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding TRV Rubber Products and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex Group and TRV Rubber 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 TRV Rubber Products are associated (or correlated) with Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of TRV Rubber i.e., TRV Rubber and Major Cineplex go up and down completely randomly.

Pair Corralation between TRV Rubber and Major Cineplex

Assuming the 90 days trading horizon TRV Rubber Products is expected to under-perform the Major Cineplex. In addition to that, TRV Rubber is 1.94 times more volatile than Major Cineplex Group. It trades about -0.2 of its total potential returns per unit of risk. Major Cineplex Group is currently generating about -0.38 per unit of volatility. If you would invest  1,484  in Major Cineplex Group on December 30, 2024 and sell it today you would lose (424.00) from holding Major Cineplex Group or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	79.37%
Values	Daily Returns

TRV Rubber Products  vs.  Major Cineplex Group

TRV Rubber Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRV Rubber Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Major Cineplex Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Major Cineplex Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with TRV Rubber and Major Cineplex

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

The idea behind TRV Rubber Products and Major Cineplex Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.