Correlation Between Trucept and Staffing 360

Can any of the company-specific risk be diversified away by investing in both Trucept and Staffing 360 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 Trucept and Staffing 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trucept and Staffing 360 Solutions, you can compare the effects of market volatilities on Trucept and Staffing 360 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 Trucept with a short position of Staffing 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trucept and Staffing 360.

Diversification Opportunities for Trucept and Staffing 360

0.33

Correlation Coefficient

Trucept  Staffing 360

Weak diversification

The 3 months correlation between Trucept and Staffing is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Trucept and Staffing 360 Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staffing 360 Solutions and Trucept 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 Trucept are associated (or correlated) with Staffing 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staffing 360 Solutions has no effect on the direction of Trucept i.e., Trucept and Staffing 360 go up and down completely randomly.

Pair Corralation between Trucept and Staffing 360

Given the investment horizon of 90 days Trucept is expected to generate 1.3 times more return on investment than Staffing 360. However, Trucept is 1.3 times more volatile than Staffing 360 Solutions. It trades about 0.11 of its potential returns per unit of risk. Staffing 360 Solutions is currently generating about -0.08 per unit of risk. If you would invest  3.10  in Trucept on January 2, 2025 and sell it today you would earn a total of  1.70  from holding Trucept or generate 54.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	46.03%
Values	Daily Returns

Trucept  vs.  Staffing 360 Solutions

Trucept

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trucept are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Trucept reported solid returns over the last few months and may actually be approaching a breakup point.

Staffing 360 Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Staffing 360 Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Trucept and Staffing 360

The main advantage of trading using opposite Trucept and Staffing 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trucept position performs unexpectedly, Staffing 360 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 Staffing 360 will offset losses from the drop in Staffing 360's long position.

The idea behind Trucept and Staffing 360 Solutions 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.