Correlation Between VITEC SOFTWARE and COMINTL BANK

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

By analyzing existing cross correlation between VITEC SOFTWARE GROUP and COMINTL BANK ADR1, you can compare the effects of market volatilities on VITEC SOFTWARE and COMINTL BANK 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 VITEC SOFTWARE with a short position of COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and COMINTL BANK.

Diversification Opportunities for VITEC SOFTWARE and COMINTL BANK

0.56

Correlation Coefficient

VITEC SOFTWARE  COMINTL BANK

Very weak diversification

The 3 months correlation between VITEC and COMINTL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 and VITEC SOFTWARE 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 VITEC SOFTWARE GROUP are associated (or correlated) with COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of VITEC SOFTWARE i.e., VITEC SOFTWARE and COMINTL BANK go up and down completely randomly.

Pair Corralation between VITEC SOFTWARE and COMINTL BANK

Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to generate 0.94 times more return on investment than COMINTL BANK. However, VITEC SOFTWARE GROUP is 1.06 times less risky than COMINTL BANK. It trades about 0.46 of its potential returns per unit of risk. COMINTL BANK ADR1 is currently generating about 0.1 per unit of risk. If you would invest  3,970  in VITEC SOFTWARE GROUP on September 27, 2024 and sell it today you would earn a total of  652.00  from holding VITEC SOFTWARE GROUP or generate 16.42% return on investment over 90 days.

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

VITEC SOFTWARE GROUP  vs.  COMINTL BANK ADR1

VITEC SOFTWARE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VITEC SOFTWARE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VITEC SOFTWARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COMINTL BANK ADR1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMINTL BANK ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COMINTL BANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VITEC SOFTWARE and COMINTL BANK

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

The idea behind VITEC SOFTWARE GROUP and COMINTL BANK ADR1 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..