Correlation Between Trematon Capital and DRA Global
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and DRA Global 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 Trematon Capital and DRA Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trematon Capital Investments and DRA Global, you can compare the effects of market volatilities on Trematon Capital and DRA Global 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 Trematon Capital with a short position of DRA Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and DRA Global.
Diversification Opportunities for Trematon Capital and DRA Global
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trematon and DRA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and DRA Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRA Global and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with DRA Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRA Global has no effect on the direction of Trematon Capital i.e., Trematon Capital and DRA Global go up and down completely randomly.
Pair Corralation between Trematon Capital and DRA Global
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 1.38 times more return on investment than DRA Global. However, Trematon Capital is 1.38 times more volatile than DRA Global. It trades about 0.03 of its potential returns per unit of risk. DRA Global is currently generating about 0.03 per unit of risk. If you would invest 19,500 in Trematon Capital Investments on September 5, 2024 and sell it today you would earn a total of 2,500 from holding Trematon Capital Investments or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Trematon Capital Investments vs. DRA Global
Performance |
| Timeline |
| Trematon Capital Inv |
| DRA Global |
Trematon Capital and DRA Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and DRA Global
The main advantage of trading using opposite Trematon Capital and DRA Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, DRA Global 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 DRA Global will offset losses from the drop in DRA Global's long position.| Trematon Capital vs. Astral Foods | Trematon Capital vs. British American Tobacco | Trematon Capital vs. Harmony Gold Mining | Trematon Capital vs. We Buy Cars |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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