Correlation Between Energy Focu and TriMas
Can any of the company-specific risk be diversified away by investing in both Energy Focu and TriMas 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 Energy Focu and TriMas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Focu and TriMas, you can compare the effects of market volatilities on Energy Focu and TriMas 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 Energy Focu with a short position of TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Focu and TriMas.
Diversification Opportunities for Energy Focu and TriMas
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and TriMas is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Energy Focu and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas and Energy Focu 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 Energy Focu are associated (or correlated) with TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of Energy Focu i.e., Energy Focu and TriMas go up and down completely randomly.
Pair Corralation between Energy Focu and TriMas
Given the investment horizon of 90 days Energy Focu is expected to generate 2.25 times more return on investment than TriMas. However, Energy Focu is 2.25 times more volatile than TriMas. It trades about 0.05 of its potential returns per unit of risk. TriMas is currently generating about -0.01 per unit of risk. If you would invest 124.00 in Energy Focu on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Energy Focu or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Focu vs. TriMas
Performance |
| Timeline |
| Energy Focu |
| TriMas |
Energy Focu and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Focu and TriMas
The main advantage of trading using opposite Energy Focu and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Focu position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| Energy Focu vs. Petros Pharmaceuticals | Energy Focu vs. Pioneer Power Solutions | Energy Focu vs. Ensysce Biosciences |
| TriMas vs. Greif Bros | TriMas vs. Karat Packaging | TriMas vs. Reynolds Consumer Products | TriMas vs. Silgan Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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