Correlation Between TRON and Frontier Markets

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

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

Diversification Opportunities for TRON and Frontier Markets

0.0

Correlation Coefficient

TRON  Frontier Markets

Pay attention - limited upside

The 3 months correlation between TRON and Frontier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Frontier Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Markets Por 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 Frontier Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Markets Por has no effect on the direction of TRON i.e., TRON and Frontier Markets go up and down completely randomly.

Pair Corralation between TRON and Frontier Markets

Assuming the 90 days trading horizon TRON is expected to under-perform the Frontier Markets. In addition to that, TRON is 4.47 times more volatile than Frontier Markets Portfolio. It trades about -0.06 of its total potential returns per unit of risk. Frontier Markets Portfolio is currently generating about -0.21 per unit of volatility. If you would invest  1,680  in Frontier Markets Portfolio on October 10, 2024 and sell it today you would lose (69.00) from holding Frontier Markets Portfolio or give up 4.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

TRON  vs.  Frontier Markets Portfolio

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.

Frontier Markets Por

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontier Markets Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Frontier Markets 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 Frontier Markets

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

The idea behind TRON and Frontier Markets Portfolio 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 Commodity Directory module to find actively traded commodities issued by global exchanges.