Correlation Between Vacasa and Trust Stamp

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

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

Diversification Opportunities for Vacasa and Trust Stamp

-0.43

Correlation Coefficient

Vacasa  Trust Stamp

Very good diversification

The 3 months correlation between Vacasa and Trust is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vacasa Inc and Trust Stamp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Stamp and Vacasa 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 Vacasa Inc are associated (or correlated) with Trust Stamp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Stamp has no effect on the direction of Vacasa i.e., Vacasa and Trust Stamp go up and down completely randomly.

Pair Corralation between Vacasa and Trust Stamp

Given the investment horizon of 90 days Vacasa Inc is expected to generate 0.23 times more return on investment than Trust Stamp. However, Vacasa Inc is 4.28 times less risky than Trust Stamp. It trades about 0.03 of its potential returns per unit of risk. Trust Stamp is currently generating about 0.0 per unit of risk. If you would invest  530.00  in Vacasa Inc on February 17, 2025 and sell it today you would earn a total of  9.00  from holding Vacasa Inc or generate 1.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	82.81%
Values	Daily Returns

Vacasa Inc  vs.  Trust Stamp

Vacasa Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Vacasa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vacasa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Trust Stamp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trust Stamp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Trust Stamp is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vacasa and Trust Stamp

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

The idea behind Vacasa Inc and Trust Stamp 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.