Correlation Between 512807AN8 and Trio Tech

Can any of the company-specific risk be diversified away by investing in both 512807AN8 and Trio Tech 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 512807AN8 and Trio Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAM RESH P and Trio Tech International, you can compare the effects of market volatilities on 512807AN8 and Trio Tech 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 512807AN8 with a short position of Trio Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 512807AN8 and Trio Tech.

Diversification Opportunities for 512807AN8 and Trio Tech

-0.08

Correlation Coefficient

512807AN8  Trio Tech

Good diversification

The 3 months correlation between 512807AN8 and Trio is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding LAM RESH P and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International and 512807AN8 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 LAM RESH P are associated (or correlated) with Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of 512807AN8 i.e., 512807AN8 and Trio Tech go up and down completely randomly.

Pair Corralation between 512807AN8 and Trio Tech

Assuming the 90 days trading horizon 512807AN8 is expected to generate 57.88 times less return on investment than Trio Tech. But when comparing it to its historical volatility, LAM RESH P is 17.36 times less risky than Trio Tech. It trades about 0.01 of its potential returns per unit of risk. Trio Tech International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  630.00  in Trio Tech International on December 22, 2024 and sell it today you would earn a total of  9.00  from holding Trio Tech International or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.67%
Values	Daily Returns

LAM RESH P  vs.  Trio Tech International

LAM RESH P

Risk-Adjusted Performance

Very Weak

Over the last 90 days LAM RESH P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 512807AN8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Trio Tech International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Trio Tech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 512807AN8 and Trio Tech

The main advantage of trading using opposite 512807AN8 and Trio Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 512807AN8 position performs unexpectedly, Trio Tech 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 Trio Tech will offset losses from the drop in Trio Tech's long position.

The idea behind LAM RESH P and Trio Tech International 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.