Correlation Between Trimax Corp and China Food

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

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

Diversification Opportunities for Trimax Corp and China Food

-0.13

Correlation Coefficient

Trimax Corp  China Food

Good diversification

The 3 months correlation between Trimax and China is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Trimax Corp and China Food and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Food and Trimax Corp 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 Trimax Corp are associated (or correlated) with China Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Food has no effect on the direction of Trimax Corp i.e., Trimax Corp and China Food go up and down completely randomly.

Pair Corralation between Trimax Corp and China Food

Given the investment horizon of 90 days Trimax Corp is expected to generate 2.6 times more return on investment than China Food. However, Trimax Corp is 2.6 times more volatile than China Food and. It trades about 0.04 of its potential returns per unit of risk. China Food and is currently generating about -0.11 per unit of risk. If you would invest  0.14  in Trimax Corp on September 25, 2024 and sell it today you would lose (0.01) from holding Trimax Corp or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Trimax Corp  vs.  China Food and

Trimax Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trimax Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Trimax Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

China Food

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Food and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, China Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trimax Corp and China Food

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

The idea behind Trimax Corp and China Food and 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.