Correlation Between Fitipower Integrated and TUL

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

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

Diversification Opportunities for Fitipower Integrated and TUL

0.72

Correlation Coefficient

Fitipower Integrated  TUL

Poor diversification

The 3 months correlation between Fitipower and TUL is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fitipower Integrated Technolog and TUL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUL Corporation and Fitipower Integrated 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 Fitipower Integrated Technology are associated (or correlated) with TUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUL Corporation has no effect on the direction of Fitipower Integrated i.e., Fitipower Integrated and TUL go up and down completely randomly.

Pair Corralation between Fitipower Integrated and TUL

Assuming the 90 days trading horizon Fitipower Integrated Technology is expected to under-perform the TUL. But the stock apears to be less risky and, when comparing its historical volatility, Fitipower Integrated Technology is 1.62 times less risky than TUL. The stock trades about -0.08 of its potential returns per unit of risk. The TUL Corporation is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  7,900  in TUL Corporation on December 5, 2024 and sell it today you would lose (250.00) from holding TUL Corporation or give up 3.16% of portfolio value over 90 days.

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

Fitipower Integrated Technolog  vs.  TUL Corp.

Fitipower Integrated

Risk-Adjusted Performance

Very Weak

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

TUL Corporation

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fitipower Integrated and TUL

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

The idea behind Fitipower Integrated Technology and TUL Corporation 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.