Correlation Between TriMas and Greif Bros

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

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

Diversification Opportunities for TriMas and Greif Bros

0.38

Correlation Coefficient

TriMas  Greif Bros

Weak diversification

The 3 months correlation between TriMas and Greif is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros and TriMas 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 TriMas are associated (or correlated) with Greif Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Bros has no effect on the direction of TriMas i.e., TriMas and Greif Bros go up and down completely randomly.

Pair Corralation between TriMas and Greif Bros

Considering the 90-day investment horizon TriMas is expected to under-perform the Greif Bros. In addition to that, TriMas is 1.0 times more volatile than Greif Bros. It trades about -0.02 of its total potential returns per unit of risk. Greif Bros is currently generating about 0.0 per unit of volatility. If you would invest  6,714  in Greif Bros on September 27, 2024 and sell it today you would lose (598.00) from holding Greif Bros or give up 8.91% of portfolio value over 90 days.

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

TriMas  vs.  Greif Bros

TriMas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TriMas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TriMas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Greif Bros

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greif Bros has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Greif Bros is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TriMas and Greif Bros

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

The idea behind TriMas and Greif Bros 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.