Correlation Between High Tide and Trxade

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

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

Diversification Opportunities for High Tide and Trxade

0.06

Correlation Coefficient

High Tide  Trxade

Significant diversification

The 3 months correlation between High and Trxade is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding High Tide and Trxade Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trxade Group and High Tide 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 High Tide are associated (or correlated) with Trxade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trxade Group has no effect on the direction of High Tide i.e., High Tide and Trxade go up and down completely randomly.

Pair Corralation between High Tide and Trxade

Given the investment horizon of 90 days High Tide is expected to generate 10.68 times less return on investment than Trxade. But when comparing it to its historical volatility, High Tide is 2.84 times less risky than Trxade. It trades about 0.01 of its potential returns per unit of risk. Trxade Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  981.00  in Trxade Group on February 6, 2024 and sell it today you would lose (352.00) from holding Trxade Group or give up 35.88% of portfolio value over 90 days.

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

High Tide  vs.  Trxade Group

High Tide

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Tide are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, High Tide demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Trxade Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trxade Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Trxade unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Tide and Trxade

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

The idea behind High Tide and Trxade Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.