Correlation Between Transamerica Financial and Foundry Partners

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

By analyzing existing cross correlation between Transamerica Financial Life and Foundry Partners Fundamental, you can compare the effects of market volatilities on Transamerica Financial and Foundry Partners 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 Transamerica Financial with a short position of Foundry Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and Foundry Partners.

Diversification Opportunities for Transamerica Financial and Foundry Partners

0.91

Correlation Coefficient

Transamerica Financial  Foundry Partners

Almost no diversification

The 3 months correlation between Transamerica and Foundry is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life and Foundry Partners Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foundry Partners Fun and Transamerica Financial 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 Transamerica Financial Life are associated (or correlated) with Foundry Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foundry Partners Fun has no effect on the direction of Transamerica Financial i.e., Transamerica Financial and Foundry Partners go up and down completely randomly.

Pair Corralation between Transamerica Financial and Foundry Partners

Assuming the 90 days horizon Transamerica Financial is expected to generate 1.4 times less return on investment than Foundry Partners. But when comparing it to its historical volatility, Transamerica Financial Life is 1.28 times less risky than Foundry Partners. It trades about 0.1 of its potential returns per unit of risk. Foundry Partners Fundamental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,635  in Foundry Partners Fundamental on May 7, 2025 and sell it today you would earn a total of  119.00  from holding Foundry Partners Fundamental or generate 7.28% return on investment over 90 days.

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

Transamerica Financial Life  vs.  Foundry Partners Fundamental

Transamerica Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Financial Life are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Transamerica Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Foundry Partners Fun

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Foundry Partners Fundamental are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Foundry Partners may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Transamerica Financial and Foundry Partners

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

The idea behind Transamerica Financial Life and Foundry Partners Fundamental 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.