Correlation Between Optimax Technology and HannsTouch Solution

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

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

Diversification Opportunities for Optimax Technology and HannsTouch Solution

0.24

Correlation Coefficient

Optimax Technology  HannsTouch Solution

Modest diversification

The 3 months correlation between Optimax and HannsTouch is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Optimax Technology Corp and HannsTouch Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HannsTouch Solution and Optimax Technology 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 Optimax Technology Corp are associated (or correlated) with HannsTouch Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HannsTouch Solution has no effect on the direction of Optimax Technology i.e., Optimax Technology and HannsTouch Solution go up and down completely randomly.

Pair Corralation between Optimax Technology and HannsTouch Solution

Assuming the 90 days trading horizon Optimax Technology Corp is expected to generate 0.86 times more return on investment than HannsTouch Solution. However, Optimax Technology Corp is 1.16 times less risky than HannsTouch Solution. It trades about 0.03 of its potential returns per unit of risk. HannsTouch Solution is currently generating about -0.25 per unit of risk. If you would invest  3,175  in Optimax Technology Corp on September 5, 2024 and sell it today you would earn a total of  30.00  from holding Optimax Technology Corp or generate 0.94% return on investment over 90 days.

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

Optimax Technology Corp  vs.  HannsTouch Solution

Optimax Technology Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Optimax Technology Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Optimax Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HannsTouch Solution

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HannsTouch Solution are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, HannsTouch Solution showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optimax Technology and HannsTouch Solution

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

The idea behind Optimax Technology Corp and HannsTouch Solution 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.