Correlation Between Triad Group and Datagroup

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

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

Diversification Opportunities for Triad Group and Datagroup

-0.35

Correlation Coefficient

Triad Group  Datagroup

Very good diversification

The 3 months correlation between Triad and Datagroup is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE and Triad Group 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 Triad Group PLC are associated (or correlated) with Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Triad Group i.e., Triad Group and Datagroup go up and down completely randomly.

Pair Corralation between Triad Group and Datagroup

Assuming the 90 days trading horizon Triad Group PLC is expected to generate 1.15 times more return on investment than Datagroup. However, Triad Group is 1.15 times more volatile than Datagroup SE. It trades about 0.12 of its potential returns per unit of risk. Datagroup SE is currently generating about -0.02 per unit of risk. If you would invest  7,626  in Triad Group PLC on September 26, 2024 and sell it today you would earn a total of  20,374  from holding Triad Group PLC or generate 267.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Triad Group PLC  vs.  Datagroup SE

Triad Group PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Triad Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Datagroup SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Datagroup SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Datagroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Triad Group and Datagroup

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

The idea behind Triad Group PLC and Datagroup SE 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.