Correlation Between INtRON Biotechnology and PH Tech

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

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

Diversification Opportunities for INtRON Biotechnology and PH Tech

0.37

Correlation Coefficient

INtRON Biotechnology  PH Tech

Weak diversification

The 3 months correlation between INtRON and 239890 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and PH Tech go up and down completely randomly.

Pair Corralation between INtRON Biotechnology and PH Tech

Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 0.8 times more return on investment than PH Tech. However, iNtRON Biotechnology is 1.25 times less risky than PH Tech. It trades about -0.01 of its potential returns per unit of risk. PH Tech Co is currently generating about -0.02 per unit of risk. If you would invest  598,695  in iNtRON Biotechnology on October 6, 2024 and sell it today you would lose (30,695) from holding iNtRON Biotechnology or give up 5.13% of portfolio value over 90 days.

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

iNtRON Biotechnology  vs.  PH Tech Co

iNtRON Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iNtRON Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INtRON Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PH Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PH Tech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PH Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with INtRON Biotechnology and PH Tech

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

The idea behind iNtRON Biotechnology and PH Tech Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.