Correlation Between Trematon Capital and AH Vest

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

By analyzing existing cross correlation between Trematon Capital Investments and AH Vest Limited, you can compare the effects of market volatilities on Trematon Capital and AH Vest 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 Trematon Capital with a short position of AH Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and AH Vest.

Diversification Opportunities for Trematon Capital and AH Vest

-0.32

Correlation Coefficient

Trematon Capital  AH Vest

Very good diversification

The 3 months correlation between Trematon and AHL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Trematon Capital i.e., Trematon Capital and AH Vest go up and down completely randomly.

Pair Corralation between Trematon Capital and AH Vest

Assuming the 90 days trading horizon Trematon Capital Investments is expected to under-perform the AH Vest. But the stock apears to be less risky and, when comparing its historical volatility, Trematon Capital Investments is 1.67 times less risky than AH Vest. The stock trades about -0.12 of its potential returns per unit of risk. The AH Vest Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in AH Vest Limited on September 13, 2024 and sell it today you would earn a total of  300.00  from holding AH Vest Limited or generate 30.0% return on investment over 90 days.

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

Trematon Capital Investments  vs.  AH Vest Limited

Trematon Capital Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trematon Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental 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.

AH Vest Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AH Vest Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AH Vest exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trematon Capital and AH Vest

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

The idea behind Trematon Capital Investments and AH Vest Limited 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.