Correlation Between TRON and Figs
Can any of the company-specific risk be diversified away by investing in both TRON and Figs 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 TRON and Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRON and Figs Inc, you can compare the effects of market volatilities on TRON and Figs 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 TRON with a short position of Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Figs.
Diversification Opportunities for TRON and Figs
Very good diversification
The 3 months correlation between TRON and Figs is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc and TRON 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 TRON are associated (or correlated) with Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of TRON i.e., TRON and Figs go up and down completely randomly.
Pair Corralation between TRON and Figs
Assuming the 90 days trading horizon TRON is expected to generate 3.86 times less return on investment than Figs. In addition to that, TRON is 1.38 times more volatile than Figs Inc. It trades about 0.02 of its total potential returns per unit of risk. Figs Inc is currently generating about 0.11 per unit of volatility. If you would invest 559.00 in Figs Inc on October 20, 2024 and sell it today you would earn a total of 35.00 from holding Figs Inc or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
TRON vs. Figs Inc
Performance |
| Timeline |
| TRON |
| Figs Inc |
TRON and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and Figs
The main advantage of trading using opposite TRON and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.The idea behind TRON and Figs Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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