Correlation Between Trust Stamp and LeddarTech Holdings

Can any of the company-specific risk be diversified away by investing in both Trust Stamp and LeddarTech Holdings 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 Trust Stamp and LeddarTech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trust Stamp and LeddarTech Holdings, you can compare the effects of market volatilities on Trust Stamp and LeddarTech Holdings 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 Trust Stamp with a short position of LeddarTech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trust Stamp and LeddarTech Holdings.

Diversification Opportunities for Trust Stamp and LeddarTech Holdings

-0.02

Correlation Coefficient

Trust Stamp  LeddarTech Holdings

Good diversification

The 3 months correlation between Trust and LeddarTech is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Trust Stamp and LeddarTech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeddarTech Holdings and Trust Stamp 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 Trust Stamp are associated (or correlated) with LeddarTech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeddarTech Holdings has no effect on the direction of Trust Stamp i.e., Trust Stamp and LeddarTech Holdings go up and down completely randomly.

Pair Corralation between Trust Stamp and LeddarTech Holdings

Given the investment horizon of 90 days Trust Stamp is expected to generate 3.34 times more return on investment than LeddarTech Holdings. However, Trust Stamp is 3.34 times more volatile than LeddarTech Holdings. It trades about 0.14 of its potential returns per unit of risk. LeddarTech Holdings is currently generating about -0.07 per unit of risk. If you would invest  24.00  in Trust Stamp on September 5, 2024 and sell it today you would earn a total of  37.00  from holding Trust Stamp or generate 154.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Trust Stamp  vs.  LeddarTech Holdings

Trust Stamp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trust Stamp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Trust Stamp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

LeddarTech Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LeddarTech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trust Stamp and LeddarTech Holdings

The main advantage of trading using opposite Trust Stamp and LeddarTech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trust Stamp position performs unexpectedly, LeddarTech Holdings 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 LeddarTech Holdings will offset losses from the drop in LeddarTech Holdings' long position.

The idea behind Trust Stamp and LeddarTech Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.