Correlation Between TRON and Aniplus

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

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

Diversification Opportunities for TRON and Aniplus

-0.64

Correlation Coefficient

TRON  Aniplus

Excellent diversification

The 3 months correlation between TRON and Aniplus is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Aniplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aniplus and TRON 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 TRON are associated (or correlated) with Aniplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aniplus has no effect on the direction of TRON i.e., TRON and Aniplus go up and down completely randomly.

Pair Corralation between TRON and Aniplus

Assuming the 90 days trading horizon TRON is expected to generate 4.3 times more return on investment than Aniplus. However, TRON is 4.3 times more volatile than Aniplus. It trades about 0.08 of its potential returns per unit of risk. Aniplus is currently generating about -0.03 per unit of risk. If you would invest  14.00  in TRON on October 10, 2024 and sell it today you would earn a total of  11.00  from holding TRON or generate 78.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.91%
Values	Daily Returns

TRON  vs.  Aniplus

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aniplus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TRON and Aniplus

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

The idea behind TRON and Aniplus 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.