Correlation Between Trk Corp and Integrated Service

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

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

Diversification Opportunities for Trk Corp and Integrated Service

-0.7

Correlation Coefficient

Trk Corp  Integrated Service

Excellent diversification

The 3 months correlation between Trk and Integrated is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Trk Corp and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and Trk Corp 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 Trk Corp are associated (or correlated) with Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Trk Corp i.e., Trk Corp and Integrated Service go up and down completely randomly.

Pair Corralation between Trk Corp and Integrated Service

Assuming the 90 days trading horizon Trk Corp is expected to generate 0.72 times more return on investment than Integrated Service. However, Trk Corp is 1.4 times less risky than Integrated Service. It trades about 0.12 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.14 per unit of risk. If you would invest  1,840  in Trk Corp on October 9, 2024 and sell it today you would earn a total of  240.00  from holding Trk Corp or generate 13.04% return on investment over 90 days.

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

Trk Corp  vs.  Integrated Service Technology

Trk Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trk Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Trk Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Integrated Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Service Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Trk Corp and Integrated Service

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

The idea behind Trk Corp and Integrated Service Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.