Correlation Between VirTra and Triumph

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

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

Diversification Opportunities for VirTra and Triumph

-0.81

Correlation Coefficient

VirTra  Triumph

Pay attention - limited upside

The 3 months correlation between VirTra and Triumph is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding VirTra Inc and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group and VirTra 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 VirTra Inc are associated (or correlated) with Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of VirTra i.e., VirTra and Triumph go up and down completely randomly.

Pair Corralation between VirTra and Triumph

Given the investment horizon of 90 days VirTra Inc is expected to under-perform the Triumph. But the stock apears to be less risky and, when comparing its historical volatility, VirTra Inc is 1.8 times less risky than Triumph. The stock trades about -0.15 of its potential returns per unit of risk. The Triumph Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,865  in Triumph Group on December 29, 2024 and sell it today you would earn a total of  678.00  from holding Triumph Group or generate 36.35% return on investment over 90 days.

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

VirTra Inc  vs.  Triumph Group

VirTra Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days VirTra Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Triumph Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Triumph demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VirTra and Triumph

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

The idea behind VirTra Inc and Triumph Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.