Correlation Between TriMas and Graham

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

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

Diversification Opportunities for TriMas and Graham

0.82

Correlation Coefficient

TriMas  Graham

Very poor diversification

The 3 months correlation between TriMas and Graham is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham and TriMas 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 TriMas are associated (or correlated) with Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of TriMas i.e., TriMas and Graham go up and down completely randomly.

Pair Corralation between TriMas and Graham

Considering the 90-day investment horizon TriMas is expected to generate 0.58 times more return on investment than Graham. However, TriMas is 1.73 times less risky than Graham. It trades about 0.3 of its potential returns per unit of risk. Graham is currently generating about 0.15 per unit of risk. If you would invest  2,451  in TriMas on May 12, 2025 and sell it today you would earn a total of  1,102  from holding TriMas or generate 44.96% return on investment over 90 days.

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

TriMas  vs.  Graham

TriMas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TriMas are ranked lower than 23 (%) 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.

Graham

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Graham are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Graham displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TriMas and Graham

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

The idea behind TriMas and Graham 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 Transaction History module to view history of all your transactions and understand their impact on performance.