Correlation Between ITM Semiconductor and People Technology
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and People Technology 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 ITM Semiconductor and People Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and People Technology, you can compare the effects of market volatilities on ITM Semiconductor and People Technology 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 ITM Semiconductor with a short position of People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and People Technology.
Diversification Opportunities for ITM Semiconductor and People Technology
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ITM and People is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and People Technology go up and down completely randomly.
Pair Corralation between ITM Semiconductor and People Technology
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to generate 1.07 times more return on investment than People Technology. However, ITM Semiconductor is 1.07 times more volatile than People Technology. It trades about -0.2 of its potential returns per unit of risk. People Technology is currently generating about -0.25 per unit of risk. If you would invest 1,435,000 in ITM Semiconductor Co on October 4, 2024 and sell it today you would lose (160,000) from holding ITM Semiconductor Co or give up 11.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ITM Semiconductor Co vs. People Technology
Performance |
Timeline |
ITM Semiconductor |
People Technology |
ITM Semiconductor and People Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ITM Semiconductor and People Technology
The main advantage of trading using opposite ITM Semiconductor and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. Hana Materials |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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