Correlation Between Trisura and Definity Financial

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

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

Diversification Opportunities for Trisura and Definity Financial

0.0

Correlation Coefficient

Trisura  Definity Financial

Pay attention - limited upside

The 3 months correlation between Trisura and Definity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Trisura Group and Definity Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definity Financial Corp and Trisura 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 Trisura Group are associated (or correlated) with Definity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definity Financial Corp has no effect on the direction of Trisura i.e., Trisura and Definity Financial go up and down completely randomly.

Pair Corralation between Trisura and Definity Financial

If you would invest  5,904  in Definity Financial Corp on February 3, 2025 and sell it today you would earn a total of  937.00  from holding Definity Financial Corp or generate 15.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Trisura Group  vs.  Definity Financial Corp

Trisura Group

Risk-Adjusted Performance

OK

Over the last 90 days Trisura Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Trisura is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Definity Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Definity Financial Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Definity Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trisura and Definity Financial

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

The idea behind Trisura Group and Definity Financial Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.