Correlation Between Admie Holding and Intertech

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

By analyzing existing cross correlation between Admie Holding SA and Intertech SA Inter, you can compare the effects of market volatilities on Admie Holding and Intertech 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 Admie Holding with a short position of Intertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Admie Holding and Intertech.

Diversification Opportunities for Admie Holding and Intertech

0.4

Correlation Coefficient

Admie Holding  Intertech

Very weak diversification

The 3 months correlation between Admie and Intertech is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Admie Holding SA and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter and Admie Holding 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 Admie Holding SA are associated (or correlated) with Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of Admie Holding i.e., Admie Holding and Intertech go up and down completely randomly.

Pair Corralation between Admie Holding and Intertech

Assuming the 90 days trading horizon Admie Holding SA is expected to generate 0.7 times more return on investment than Intertech. However, Admie Holding SA is 1.44 times less risky than Intertech. It trades about 0.14 of its potential returns per unit of risk. Intertech SA Inter is currently generating about 0.07 per unit of risk. If you would invest  258.00  in Admie Holding SA on December 29, 2024 and sell it today you would earn a total of  40.00  from holding Admie Holding SA or generate 15.5% return on investment over 90 days.

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

Admie Holding SA  vs.  Intertech SA Inter

Admie Holding SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Admie Holding SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Admie Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

Intertech SA Inter

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intertech SA Inter are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intertech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Admie Holding and Intertech

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

The idea behind Admie Holding SA and Intertech SA Inter 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.