Correlation Between Trinity Biotech and Fonar
Can any of the company-specific risk be diversified away by investing in both Trinity Biotech and Fonar 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 Trinity Biotech and Fonar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinity Biotech plc and Fonar, you can compare the effects of market volatilities on Trinity Biotech and Fonar 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 Trinity Biotech with a short position of Fonar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Biotech and Fonar.
Diversification Opportunities for Trinity Biotech and Fonar
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trinity and Fonar is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Biotech plc and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar and Trinity Biotech 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 Trinity Biotech plc are associated (or correlated) with Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Trinity Biotech i.e., Trinity Biotech and Fonar go up and down completely randomly.
Pair Corralation between Trinity Biotech and Fonar
Given the investment horizon of 90 days Trinity Biotech plc is expected to under-perform the Fonar. But the stock apears to be less risky and, when comparing its historical volatility, Trinity Biotech plc is 1.08 times less risky than Fonar. The stock trades about -0.74 of its potential returns per unit of risk. The Fonar is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,520 in Fonar on September 1, 2024 and sell it today you would earn a total of 127.00 from holding Fonar or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trinity Biotech plc vs. Fonar
Performance |
| Timeline |
| Trinity Biotech plc |
| Fonar |
Trinity Biotech and Fonar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trinity Biotech and Fonar
The main advantage of trading using opposite Trinity Biotech and Fonar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinity Biotech position performs unexpectedly, Fonar 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 Fonar will offset losses from the drop in Fonar's long position.| Trinity Biotech vs. Star Equity Holdings | Trinity Biotech vs. Standard Biotools | Trinity Biotech vs. Biodesix | Trinity Biotech vs. ENDRA Life Sciences |
| Fonar vs. Burning Rock Biotech | Fonar vs. Sera Prognostics | Fonar vs. Exagen Inc | Fonar vs. Castle Biosciences |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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