Correlation Between CVD Equipment and Trio Tech
Can any of the company-specific risk be diversified away by investing in both CVD Equipment 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 CVD Equipment and Trio Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Trio Tech International, you can compare the effects of market volatilities on CVD Equipment 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 CVD Equipment with a short position of Trio Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Trio Tech.
Diversification Opportunities for CVD Equipment and Trio Tech
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVD and Trio is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment 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 CVD Equipment 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 CVD Equipment 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 CVD Equipment i.e., CVD Equipment and Trio Tech go up and down completely randomly.
Pair Corralation between CVD Equipment and Trio Tech
Considering the 90-day investment horizon CVD Equipment is expected to under-perform the Trio Tech. In addition to that, CVD Equipment is 1.4 times more volatile than Trio Tech International. It trades about -0.04 of its total potential returns per unit of risk. Trio Tech International is currently generating about 0.02 per unit of volatility. If you would invest 514.00 in Trio Tech International on October 20, 2024 and sell it today you would earn a total of 71.00 from holding Trio Tech International or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CVD Equipment vs. Trio Tech International
Performance |
| Timeline |
| CVD Equipment |
| Trio Tech International |
CVD Equipment and Trio Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVD Equipment and Trio Tech
The main advantage of trading using opposite CVD Equipment and Trio Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment 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.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries |
| Trio Tech vs. Aehr Test Systems | Trio Tech vs. Camtek | Trio Tech vs. Nova | Trio Tech vs. Axcelis Technologies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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