Correlation Between CarsalesCom and Trisura
Can any of the company-specific risk be diversified away by investing in both CarsalesCom and Trisura 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 CarsalesCom and Trisura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Trisura Group, you can compare the effects of market volatilities on CarsalesCom and Trisura 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 CarsalesCom with a short position of Trisura. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and Trisura.
Diversification Opportunities for CarsalesCom and Trisura
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CarsalesCom and Trisura is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and CarsalesCom 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 CarsalesCom are associated (or correlated) with Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of CarsalesCom i.e., CarsalesCom and Trisura go up and down completely randomly.
Pair Corralation between CarsalesCom and Trisura
Assuming the 90 days horizon CarsalesCom is expected to under-perform the Trisura. But the stock apears to be less risky and, when comparing its historical volatility, CarsalesCom is 1.18 times less risky than Trisura. The stock trades about -0.62 of its potential returns per unit of risk. The Trisura Group is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Trisura Group on October 1, 2024 and sell it today you would lose (160.00) from holding Trisura Group or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Trisura Group
Performance |
| Timeline |
| CarsalesCom |
| Trisura Group |
CarsalesCom and Trisura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and Trisura
The main advantage of trading using opposite CarsalesCom and Trisura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom position performs unexpectedly, Trisura 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 Trisura will offset losses from the drop in Trisura's long position.| CarsalesCom vs. Alphabet | CarsalesCom vs. Meta Platforms | CarsalesCom vs. Meta Platforms | CarsalesCom vs. AIRBNB INC DL 01 |
| Trisura vs. First American Financial | Trisura vs. nib holdings limited | Trisura vs. Lancashire Holdings Limited | Trisura vs. EMPLOYERS HLDGS DL |
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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