Correlation Between SOVEREIGN TRUST and CONSOLIDATED HALLMARK

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

By analyzing existing cross correlation between SOVEREIGN TRUST INSURANCE and CONSOLIDATED HALLMARK HOLDINGS, you can compare the effects of market volatilities on SOVEREIGN TRUST and CONSOLIDATED HALLMARK 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 SOVEREIGN TRUST with a short position of CONSOLIDATED HALLMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOVEREIGN TRUST and CONSOLIDATED HALLMARK.

Diversification Opportunities for SOVEREIGN TRUST and CONSOLIDATED HALLMARK

0.94

Correlation Coefficient

SOVEREIGN TRUST  CONSOLIDATED HALLMARK

Almost no diversification

The 3 months correlation between SOVEREIGN and CONSOLIDATED is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SOVEREIGN TRUST INSURANCE and CONSOLIDATED HALLMARK HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED HALLMARK and SOVEREIGN TRUST 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 SOVEREIGN TRUST INSURANCE are associated (or correlated) with CONSOLIDATED HALLMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED HALLMARK has no effect on the direction of SOVEREIGN TRUST i.e., SOVEREIGN TRUST and CONSOLIDATED HALLMARK go up and down completely randomly.

Pair Corralation between SOVEREIGN TRUST and CONSOLIDATED HALLMARK

Assuming the 90 days trading horizon SOVEREIGN TRUST INSURANCE is expected to generate 1.34 times more return on investment than CONSOLIDATED HALLMARK. However, SOVEREIGN TRUST is 1.34 times more volatile than CONSOLIDATED HALLMARK HOLDINGS. It trades about 0.35 of its potential returns per unit of risk. CONSOLIDATED HALLMARK HOLDINGS is currently generating about 0.21 per unit of risk. If you would invest  100.00  in SOVEREIGN TRUST INSURANCE on May 17, 2025 and sell it today you would earn a total of  224.00  from holding SOVEREIGN TRUST INSURANCE or generate 224.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

SOVEREIGN TRUST INSURANCE  vs.  CONSOLIDATED HALLMARK HOLDINGS

SOVEREIGN TRUST INSURANCE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SOVEREIGN TRUST INSURANCE are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, SOVEREIGN TRUST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK HOLDINGS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, CONSOLIDATED HALLMARK disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOVEREIGN TRUST and CONSOLIDATED HALLMARK

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

The idea behind SOVEREIGN TRUST INSURANCE and CONSOLIDATED HALLMARK HOLDINGS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.