Correlation Between Trxade and Obayashi

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

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

Diversification Opportunities for Trxade and Obayashi

-0.49

Correlation Coefficient

Trxade  Obayashi

Very good diversification

The 3 months correlation between Trxade and Obayashi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group and Obayashi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obayashi and Trxade 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 Trxade Group are associated (or correlated) with Obayashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obayashi has no effect on the direction of Trxade i.e., Trxade and Obayashi go up and down completely randomly.

Pair Corralation between Trxade and Obayashi

If you would invest  746.00  in Trxade Group on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Trxade Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Trxade Group  vs.  Obayashi

Trxade Group

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain fundamental indicators, Trxade may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Obayashi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Obayashi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Obayashi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trxade and Obayashi

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

The idea behind Trxade Group and Obayashi 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.