Correlation Between Triumph and Embraer SA
Can any of the company-specific risk be diversified away by investing in both Triumph and Embraer 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 Triumph and Embraer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triumph Group and Embraer SA ADR, you can compare the effects of market volatilities on Triumph and Embraer 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 Triumph with a short position of Embraer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph and Embraer SA.
Diversification Opportunities for Triumph and Embraer SA
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Triumph and Embraer is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and Embraer SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embraer SA ADR and Triumph 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 Triumph Group are associated (or correlated) with Embraer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embraer SA ADR has no effect on the direction of Triumph i.e., Triumph and Embraer SA go up and down completely randomly.
Pair Corralation between Triumph and Embraer SA
If you would invest 3,419 in Embraer SA ADR on August 31, 2024 and sell it today you would earn a total of 401.00 from holding Embraer SA ADR or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Triumph Group vs. Embraer SA ADR
Performance |
| Timeline |
| Triumph Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Embraer SA ADR |
Triumph and Embraer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph and Embraer SA
The main advantage of trading using opposite Triumph and Embraer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph position performs unexpectedly, Embraer 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 Embraer SA will offset losses from the drop in Embraer SA's long position.| Triumph vs. Addus HomeCare | Triumph vs. SunLink Health Systems | Triumph vs. Sonida Senior Living | Triumph vs. Boston Properties |
| Embraer SA vs. HEICO | Embraer SA vs. Vertical Aerospace | Embraer SA vs. Rolls Royce Holdings plc | Embraer SA vs. Rocket Lab USA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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