Correlation Between Trustco Group and Omnia Holdings

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

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

Diversification Opportunities for Trustco Group and Omnia Holdings

-0.57

Correlation Coefficient

Trustco Group  Omnia Holdings

Excellent diversification

The 3 months correlation between Trustco and Omnia is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Trustco Group Holdings and Omnia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnia Holdings and Trustco Group 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 Trustco Group Holdings are associated (or correlated) with Omnia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnia Holdings has no effect on the direction of Trustco Group i.e., Trustco Group and Omnia Holdings go up and down completely randomly.

Pair Corralation between Trustco Group and Omnia Holdings

Assuming the 90 days trading horizon Trustco Group Holdings is expected to generate 1.95 times more return on investment than Omnia Holdings. However, Trustco Group is 1.95 times more volatile than Omnia Holdings Limited. It trades about 0.08 of its potential returns per unit of risk. Omnia Holdings Limited is currently generating about -0.1 per unit of risk. If you would invest  3,500  in Trustco Group Holdings on October 15, 2024 and sell it today you would earn a total of  200.00  from holding Trustco Group Holdings or generate 5.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Trustco Group Holdings  vs.  Omnia Holdings Limited

Trustco Group Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trustco Group Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Trustco Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Omnia Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Omnia Holdings Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Omnia Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Trustco Group and Omnia Holdings

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

The idea behind Trustco Group Holdings and Omnia Holdings Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.