Correlation Between Draganfly and Triumph

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

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

Diversification Opportunities for Draganfly and Triumph

0.44

Correlation Coefficient

Draganfly  Triumph

Very weak diversification

The 3 months correlation between Draganfly and Triumph is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Draganfly and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group and Draganfly 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 Draganfly are associated (or correlated) with Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Draganfly i.e., Draganfly and Triumph go up and down completely randomly.

Pair Corralation between Draganfly and Triumph

Given the investment horizon of 90 days Draganfly is expected to generate 4.32 times more return on investment than Triumph. However, Draganfly is 4.32 times more volatile than Triumph Group. It trades about 0.09 of its potential returns per unit of risk. Triumph Group is currently generating about -0.2 per unit of risk. If you would invest  24.00  in Draganfly on January 29, 2024 and sell it today you would earn a total of  2.00  from holding Draganfly or generate 8.33% return on investment over 90 days.

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

Draganfly  vs.  Triumph Group

Draganfly

Risk-Adjusted Performance

0 of 100

Very Weak

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

Triumph Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triumph Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Draganfly and Triumph

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

The idea behind Draganfly and Triumph Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.