Correlation Between Trinseo SA and H B
Can any of the company-specific risk be diversified away by investing in both Trinseo SA and H B 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 Trinseo SA and H B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinseo SA and H B Fuller, you can compare the effects of market volatilities on Trinseo SA and H B 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 Trinseo SA with a short position of H B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinseo SA and H B.
Diversification Opportunities for Trinseo SA and H B
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trinseo and FUL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Trinseo SA and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Trinseo SA 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 Trinseo SA are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Trinseo SA i.e., Trinseo SA and H B go up and down completely randomly.
Pair Corralation between Trinseo SA and H B
Considering the 90-day investment horizon Trinseo SA is expected to under-perform the H B. In addition to that, Trinseo SA is 3.56 times more volatile than H B Fuller. It trades about -0.03 of its total potential returns per unit of risk. H B Fuller is currently generating about 0.01 per unit of volatility. If you would invest 7,230 in H B Fuller on September 8, 2024 and sell it today you would earn a total of 324.00 from holding H B Fuller or generate 4.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Trinseo SA vs. H B Fuller
Performance |
Timeline |
Trinseo SA |
H B Fuller |
Trinseo SA and H B Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trinseo SA and H B
The main advantage of trading using opposite Trinseo SA and H B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinseo SA position performs unexpectedly, H B 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 H B will offset losses from the drop in H B's long position.Trinseo SA vs. Perimeter Solutions SA | Trinseo SA vs. Kronos Worldwide | Trinseo SA vs. Sensient Technologies | Trinseo SA vs. Element Solutions |
Check out your portfolio center.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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