Correlation Between Triumph and Eve Holding

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

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

Diversification Opportunities for Triumph and Eve Holding

0.61

Correlation Coefficient

Triumph  Eve Holding

Poor diversification

The 3 months correlation between Triumph and Eve is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and Triumph 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 Triumph Group are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Triumph i.e., Triumph and Eve Holding go up and down completely randomly.

Pair Corralation between Triumph and Eve Holding

Considering the 90-day investment horizon Triumph Group is expected to generate 0.98 times more return on investment than Eve Holding. However, Triumph Group is 1.03 times less risky than Eve Holding. It trades about 0.05 of its potential returns per unit of risk. Eve Holding is currently generating about -0.01 per unit of risk. If you would invest  977.00  in Triumph Group on September 12, 2024 and sell it today you would earn a total of  912.00  from holding Triumph Group or generate 93.35% return on investment over 90 days.

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

Triumph Group  vs.  Eve Holding

Triumph Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Triumph demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Eve Holding

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eve Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Eve Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triumph and Eve Holding

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

The idea behind Triumph Group and Eve Holding 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.