Correlation Between TRON and INTNED

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

By analyzing existing cross correlation between TRON and INTNED 65, you can compare the effects of market volatilities on TRON and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and INTNED.

Diversification Opportunities for TRON and INTNED

0.24

Correlation Coefficient

TRON  INTNED

Modest diversification

The 3 months correlation between TRON and INTNED is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TRON and INTNED 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 65 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 65 has no effect on the direction of TRON i.e., TRON and INTNED go up and down completely randomly.

Pair Corralation between TRON and INTNED

Assuming the 90 days trading horizon TRON is expected to generate 4.61 times more return on investment than INTNED. However, TRON is 4.61 times more volatile than INTNED 65. It trades about 0.07 of its potential returns per unit of risk. INTNED 65 is currently generating about 0.0 per unit of risk. If you would invest  5.76  in TRON on December 24, 2024 and sell it today you would earn a total of  18.24  from holding TRON or generate 316.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.47%
Values	Daily Returns

TRON  vs.  INTNED 65

TRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TRON is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

INTNED 65

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTNED 65 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for INTNED 65 investors.

Pair Trading with TRON and INTNED

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

The idea behind TRON and INTNED 65 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.