Correlation Between International Paper and TriMas

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

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

Diversification Opportunities for International Paper and TriMas

0.71

Correlation Coefficient

International Paper  TriMas

Poor diversification

The 3 months correlation between International and TriMas is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding International Paper and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas and International Paper 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 International Paper are associated (or correlated) with TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of International Paper i.e., International Paper and TriMas go up and down completely randomly.

Pair Corralation between International Paper and TriMas

Allowing for the 90-day total investment horizon International Paper is expected to generate 4.74 times less return on investment than TriMas. In addition to that, International Paper is 1.24 times more volatile than TriMas. It trades about 0.05 of its total potential returns per unit of risk. TriMas is currently generating about 0.29 per unit of volatility. If you would invest  2,460  in TriMas on May 4, 2025 and sell it today you would earn a total of  1,032  from holding TriMas or generate 41.95% return on investment over 90 days.

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

International Paper  vs.  TriMas

International Paper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in International Paper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, International Paper may actually be approaching a critical reversion point that can send shares even higher in September 2025.

TriMas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TriMas are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TriMas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Paper and TriMas

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

The idea behind International Paper and TriMas 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.