Correlation Between Information Technology and Cayman Tung

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

By analyzing existing cross correlation between Information Technology Total and Cayman Tung Ling, you can compare the effects of market volatilities on Information Technology and Cayman Tung 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 Information Technology with a short position of Cayman Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Technology and Cayman Tung.

Diversification Opportunities for Information Technology and Cayman Tung

0.0

Correlation Coefficient

Information Technology  Cayman Tung

Pay attention - limited upside

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

Pair Corralation between Information Technology and Cayman Tung

If you would invest  4,325  in Information Technology Total on October 22, 2024 and sell it today you would earn a total of  300.00  from holding Information Technology Total or generate 6.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Information Technology Total  vs.  Cayman Tung Ling

Information Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Information Technology Total are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Information Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cayman Tung Ling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cayman Tung Ling has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Cayman Tung 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 Information Technology and Cayman Tung

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

The idea behind Information Technology Total and Cayman Tung Ling 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.