Correlation Between Trematon Capital and Frontier Transport
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and Frontier Transport 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 Frontier Transport 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 Frontier Transport Holdings, you can compare the effects of market volatilities on Trematon Capital and Frontier Transport 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 Frontier Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Frontier Transport.
Diversification Opportunities for Trematon Capital and Frontier Transport
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trematon and Frontier is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Frontier Transport Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Transport 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 Frontier Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Transport has no effect on the direction of Trematon Capital i.e., Trematon Capital and Frontier Transport go up and down completely randomly.
Pair Corralation between Trematon Capital and Frontier Transport
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 1.99 times more return on investment than Frontier Transport. However, Trematon Capital is 1.99 times more volatile than Frontier Transport Holdings. It trades about 0.02 of its potential returns per unit of risk. Frontier Transport Holdings is currently generating about -0.09 per unit of risk. If you would invest 20,000 in Trematon Capital Investments on December 11, 2024 and sell it today you would earn a total of 0.00 from holding Trematon Capital Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trematon Capital Investments vs. Frontier Transport Holdings
Performance |
| Timeline |
| Trematon Capital Inv |
| Frontier Transport |
Trematon Capital and Frontier Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and Frontier Transport
The main advantage of trading using opposite Trematon Capital and Frontier Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, Frontier Transport 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 Frontier Transport will offset losses from the drop in Frontier Transport's long position.| Trematon Capital vs. Lesaka Technologies | Trematon Capital vs. Astral Foods | Trematon Capital vs. Allied Electronics | Trematon Capital vs. Astoria Investments |
| Frontier Transport vs. Sasol Ltd Bee | Frontier Transport vs. Burstone Group Limited | Frontier Transport vs. AfricaRhodium ETF | Frontier Transport vs. CoreShares Preference Share |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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