Correlation Between V One and ITM Semiconductor

Can any of the company-specific risk be diversified away by investing in both V One and ITM Semiconductor 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 V One and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for V One and ITM Semiconductor

-0.11

Correlation Coefficient

V One  ITM Semiconductor

Good diversification

The 3 months correlation between 251630 and ITM is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding V One Tech Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and V One 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 V One Tech Co are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of V One i.e., V One and ITM Semiconductor go up and down completely randomly.

Pair Corralation between V One and ITM Semiconductor

Assuming the 90 days trading horizon V One Tech Co is expected to generate 1.03 times more return on investment than ITM Semiconductor. However, V One is 1.03 times more volatile than ITM Semiconductor Co. It trades about 0.1 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.04 per unit of risk. If you would invest  383,319  in V One Tech Co on December 23, 2024 and sell it today you would earn a total of  55,181  from holding V One Tech Co or generate 14.4% return on investment over 90 days.

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

V One Tech Co  vs.  ITM Semiconductor Co

V One Tech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in V One Tech Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V One sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with V One and ITM Semiconductor

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

The idea behind V One Tech Co and ITM Semiconductor 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.