Correlation Between TriMas and Washington Federal

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

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

Diversification Opportunities for TriMas and Washington Federal

0.55

Correlation Coefficient

TriMas  Washington Federal

Very weak diversification

The 3 months correlation between TriMas and Washington is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal 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 Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of TriMas i.e., TriMas and Washington Federal go up and down completely randomly.

Pair Corralation between TriMas and Washington Federal

Considering the 90-day investment horizon TriMas is expected to generate 1.31 times more return on investment than Washington Federal. However, TriMas is 1.31 times more volatile than Washington Federal. It trades about 0.31 of its potential returns per unit of risk. Washington Federal is currently generating about 0.0 per unit of risk. If you would invest  2,460  in TriMas on May 3, 2025 and sell it today you would earn a total of  1,113  from holding TriMas or generate 45.24% return on investment over 90 days.

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

TriMas  vs.  Washington Federal

TriMas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TriMas are ranked lower than 24 (%) 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.

Washington Federal

Risk-Adjusted Performance

Weak

Over the last 90 days Washington Federal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Washington Federal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TriMas and Washington Federal

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

The idea behind TriMas and Washington Federal 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.