Correlation Between TRON and Ssga Sp

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

By analyzing existing cross correlation between TRON and Ssga Sp 500, you can compare the effects of market volatilities on TRON and Ssga Sp 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 Ssga Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Ssga Sp.

Diversification Opportunities for TRON and Ssga Sp

0.22

Correlation Coefficient

TRON  Ssga Sp

Modest diversification

The 3 months correlation between TRON and Ssga is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Ssga Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga Sp 500 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 Ssga Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga Sp 500 has no effect on the direction of TRON i.e., TRON and Ssga Sp go up and down completely randomly.

Pair Corralation between TRON and Ssga Sp

Assuming the 90 days trading horizon TRON is expected to generate 12.63 times more return on investment than Ssga Sp. However, TRON is 12.63 times more volatile than Ssga Sp 500. It trades about 0.09 of its potential returns per unit of risk. Ssga Sp 500 is currently generating about -0.03 per unit of risk. If you would invest  17.00  in TRON on October 26, 2024 and sell it today you would earn a total of  8.00  from holding TRON or generate 47.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

TRON  vs.  Ssga Sp 500

TRON

Risk-Adjusted Performance

7 of 100

Modest

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.

Ssga Sp 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ssga Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ssga Sp 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 Ssga Sp

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

The idea behind TRON and Ssga Sp 500 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.