Correlation Between Dynapack International and Integrated Service

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

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

Diversification Opportunities for Dynapack International and Integrated Service

0.07

Correlation Coefficient

Dynapack International  Integrated Service

Significant diversification

The 3 months correlation between Dynapack and Integrated is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dynapack International Technol and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and Dynapack International 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 Dynapack International Technology 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 Dynapack International i.e., Dynapack International and Integrated Service go up and down completely randomly.

Pair Corralation between Dynapack International and Integrated Service

Assuming the 90 days trading horizon Dynapack International Technology is expected to generate 1.67 times more return on investment than Integrated Service. However, Dynapack International is 1.67 times more volatile than Integrated Service Technology. It trades about -0.04 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.12 per unit of risk. If you would invest  21,650  in Dynapack International Technology on December 26, 2024 and sell it today you would lose (2,300) from holding Dynapack International Technology or give up 10.62% of portfolio value over 90 days.

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

Dynapack International Technol  vs.  Integrated Service Technology

Dynapack International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynapack International 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.

Integrated Service

Risk-Adjusted Performance

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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Dynapack International and Integrated Service

The main advantage of trading using opposite Dynapack International and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynapack International 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 Dynapack International Technology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.