Correlation Between Styrenix Performance and Trent
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By analyzing existing cross correlation between Styrenix Performance Materials and Trent Limited, you can compare the effects of market volatilities on Styrenix Performance and Trent 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 Styrenix Performance with a short position of Trent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Styrenix Performance and Trent.
Diversification Opportunities for Styrenix Performance and Trent
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Styrenix and Trent is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Styrenix Performance Materials and Trent Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trent Limited and Styrenix Performance 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 Styrenix Performance Materials are associated (or correlated) with Trent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trent Limited has no effect on the direction of Styrenix Performance i.e., Styrenix Performance and Trent go up and down completely randomly.
Pair Corralation between Styrenix Performance and Trent
Assuming the 90 days trading horizon Styrenix Performance is expected to generate 1.97 times less return on investment than Trent. But when comparing it to its historical volatility, Styrenix Performance Materials is 1.16 times less risky than Trent. It trades about 0.02 of its potential returns per unit of risk. Trent Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 539,335 in Trent Limited on October 26, 2024 and sell it today you would earn a total of 34,025 from holding Trent Limited or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Styrenix Performance Materials vs. Trent Limited
Performance |
| Timeline |
| Styrenix Performance |
| Trent Limited |
Styrenix Performance and Trent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Styrenix Performance and Trent
The main advantage of trading using opposite Styrenix Performance and Trent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Styrenix Performance position performs unexpectedly, Trent 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 Trent will offset losses from the drop in Trent's long position.The idea behind Styrenix Performance Materials and Trent Limited 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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