Correlation Between TRON and Hussman Strategic

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

By analyzing existing cross correlation between TRON and Hussman Strategic Allocation, you can compare the effects of market volatilities on TRON and Hussman Strategic 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 Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Hussman Strategic.

Diversification Opportunities for TRON and Hussman Strategic

0.68

Correlation Coefficient

TRON  Hussman Strategic

Poor diversification

The 3 months correlation between TRON and Hussman is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Hussman Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic 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 Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic has no effect on the direction of TRON i.e., TRON and Hussman Strategic go up and down completely randomly.

Pair Corralation between TRON and Hussman Strategic

Assuming the 90 days trading horizon TRON is expected to generate 29.05 times more return on investment than Hussman Strategic. However, TRON is 29.05 times more volatile than Hussman Strategic Allocation. It trades about 0.08 of its potential returns per unit of risk. Hussman Strategic Allocation is currently generating about 0.02 per unit of risk. If you would invest  6.57  in TRON on October 26, 2024 and sell it today you would earn a total of  18.43  from holding TRON or generate 280.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	60.32%
Values	Daily Returns

TRON  vs.  Hussman Strategic Allocation

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.

Hussman Strategic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hussman Strategic Allocation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Hussman Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TRON and Hussman Strategic

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

The idea behind TRON and Hussman Strategic Allocation 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.