Correlation Between As Commercial and Intertech

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

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

Diversification Opportunities for As Commercial and Intertech

0.21

Correlation Coefficient

As Commercial  Intertech

Modest diversification

The 3 months correlation between ASCO and Intertech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding As Commercial Industrial 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 As Commercial 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 As Commercial Industrial 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 As Commercial i.e., As Commercial and Intertech go up and down completely randomly.

Pair Corralation between As Commercial and Intertech

Assuming the 90 days trading horizon As Commercial Industrial is expected to generate 0.66 times more return on investment than Intertech. However, As Commercial Industrial is 1.51 times less risky than Intertech. It trades about 0.27 of its potential returns per unit of risk. Intertech SA Inter is currently generating about 0.04 per unit of risk. If you would invest  279.00  in As Commercial Industrial on December 31, 2024 and sell it today you would earn a total of  85.00  from holding As Commercial Industrial or generate 30.47% return on investment over 90 days.

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

As Commercial Industrial  vs.  Intertech SA Inter

As Commercial Industrial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in As Commercial Industrial are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, As Commercial unveiled 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 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Intertech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with As Commercial and Intertech

The main advantage of trading using opposite As Commercial and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if As Commercial 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 As Commercial Industrial 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.

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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..