Correlation Between Hitron Technologies and CyberTAN Technology

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

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

Diversification Opportunities for Hitron Technologies and CyberTAN Technology

0.08

Correlation Coefficient

Hitron Technologies  CyberTAN Technology

Significant diversification

The 3 months correlation between Hitron and CyberTAN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hitron Technologies and CyberTAN Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberTAN Technology and Hitron Technologies 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 Hitron Technologies are associated (or correlated) with CyberTAN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberTAN Technology has no effect on the direction of Hitron Technologies i.e., Hitron Technologies and CyberTAN Technology go up and down completely randomly.

Pair Corralation between Hitron Technologies and CyberTAN Technology

Assuming the 90 days trading horizon Hitron Technologies is expected to generate 0.86 times more return on investment than CyberTAN Technology. However, Hitron Technologies is 1.17 times less risky than CyberTAN Technology. It trades about 0.0 of its potential returns per unit of risk. CyberTAN Technology is currently generating about -0.06 per unit of risk. If you would invest  3,045  in Hitron Technologies on September 17, 2024 and sell it today you would lose (60.00) from holding Hitron Technologies or give up 1.97% of portfolio value over 90 days.

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

Hitron Technologies  vs.  CyberTAN Technology

Hitron Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hitron Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hitron Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CyberTAN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberTAN Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Hitron Technologies and CyberTAN Technology

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

The idea behind Hitron Technologies and CyberTAN 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.