Correlation Between H B and Trinseo SA
Can any of the company-specific risk be diversified away by investing in both H B and Trinseo SA 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 H B and Trinseo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H B Fuller and Trinseo SA, you can compare the effects of market volatilities on H B and Trinseo SA 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 H B with a short position of Trinseo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of H B and Trinseo SA.
Diversification Opportunities for H B and Trinseo SA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FUL and Trinseo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding H B Fuller and Trinseo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinseo SA and H B 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 H B Fuller are associated (or correlated) with Trinseo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinseo SA has no effect on the direction of H B i.e., H B and Trinseo SA go up and down completely randomly.
Pair Corralation between H B and Trinseo SA
Considering the 90-day investment horizon H B Fuller is expected to generate 0.37 times more return on investment than Trinseo SA. However, H B Fuller is 2.68 times less risky than Trinseo SA. It trades about 0.1 of its potential returns per unit of risk. Trinseo SA is currently generating about -0.25 per unit of risk. If you would invest 7,534 in H B Fuller on August 28, 2024 and sell it today you would earn a total of 265.00 from holding H B Fuller or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H B Fuller vs. Trinseo SA
Performance |
| Timeline |
| H B Fuller |
| Trinseo SA |
H B and Trinseo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H B and Trinseo SA
The main advantage of trading using opposite H B and Trinseo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H B position performs unexpectedly, Trinseo SA 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 Trinseo SA will offset losses from the drop in Trinseo SA's long position.The idea behind H B Fuller and Trinseo SA 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.| Trinseo SA vs. Quaker Chemical | Trinseo SA vs. Minerals Technologies | Trinseo SA vs. Innospec | Trinseo SA vs. H B Fuller |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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