Correlation Between Davicom Semiconductor and ITE Tech

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

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

Diversification Opportunities for Davicom Semiconductor and ITE Tech

0.0

Correlation Coefficient

Davicom Semiconductor  ITE Tech

Pay attention - limited upside

The 3 months correlation between Davicom and ITE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Davicom Semiconductor and ITE Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITE Tech and Davicom 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 Davicom Semiconductor are associated (or correlated) with ITE Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITE Tech has no effect on the direction of Davicom Semiconductor i.e., Davicom Semiconductor and ITE Tech go up and down completely randomly.

Pair Corralation between Davicom Semiconductor and ITE Tech

If you would invest (100.00) in ITE Tech on October 24, 2024 and sell it today you would earn a total of  100.00  from holding ITE Tech or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Davicom Semiconductor  vs.  ITE Tech

Davicom Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Davicom Semiconductor 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.

ITE Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Davicom Semiconductor and ITE Tech

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

The idea behind Davicom Semiconductor and ITE Tech 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 Correlations module to find global opportunities by holding instruments from different markets.