Correlation Between TriMas and Cascades
Can any of the company-specific risk be diversified away by investing in both TriMas and Cascades 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 TriMas and Cascades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriMas and Cascades, you can compare the effects of market volatilities on TriMas and Cascades 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 TriMas with a short position of Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriMas and Cascades.
Diversification Opportunities for TriMas and Cascades
Very weak diversification
The 3 months correlation between TriMas and Cascades is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades and TriMas 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 TriMas are associated (or correlated) with Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of TriMas i.e., TriMas and Cascades go up and down completely randomly.
Pair Corralation between TriMas and Cascades
Considering the 90-day investment horizon TriMas is expected to generate 0.63 times more return on investment than Cascades. However, TriMas is 1.6 times less risky than Cascades. It trades about 0.02 of its potential returns per unit of risk. Cascades is currently generating about 0.01 per unit of risk. If you would invest 2,576 in TriMas on September 4, 2024 and sell it today you would earn a total of 81.00 from holding TriMas or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.54% |
| Values | Daily Returns |
TriMas vs. Cascades
Performance |
| Timeline |
| TriMas |
| Cascades |
TriMas and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriMas and Cascades
The main advantage of trading using opposite TriMas and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriMas position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.| TriMas vs. Greif Bros | TriMas vs. Karat Packaging | TriMas vs. Reynolds Consumer Products | TriMas vs. Silgan Holdings |
| Cascades vs. Advantage Solutions | Cascades vs. Atlas Corp | Cascades vs. PureCycle Technologies | Cascades vs. WM Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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