Correlation Between ITM Semiconductor and Eugene Special

Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Eugene Special 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 Eugene Special 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 Eugene Special Purpose, you can compare the effects of market volatilities on ITM Semiconductor and Eugene Special 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 Eugene Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Eugene Special.

Diversification Opportunities for ITM Semiconductor and Eugene Special

0.22

Correlation Coefficient

ITM Semiconductor  Eugene Special

Modest diversification

The 3 months correlation between ITM and Eugene is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Eugene Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Special Purpose 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 Eugene Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Special Purpose has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Eugene Special go up and down completely randomly.

Pair Corralation between ITM Semiconductor and Eugene Special

Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Eugene Special. In addition to that, ITM Semiconductor is 1.24 times more volatile than Eugene Special Purpose. It trades about -0.04 of its total potential returns per unit of risk. Eugene Special Purpose is currently generating about -0.03 per unit of volatility. If you would invest  189,700  in Eugene Special Purpose on December 23, 2024 and sell it today you would lose (8,400) from holding Eugene Special Purpose or give up 4.43% of portfolio value over 90 days.

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

ITM Semiconductor Co  vs.  Eugene Special Purpose

ITM Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITM Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Eugene Special Purpose

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ITM Semiconductor and Eugene Special

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

The idea behind ITM Semiconductor Co and Eugene Special Purpose 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..