Correlation Between Altigen Communications and Integrated Ventures

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

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

Diversification Opportunities for Altigen Communications and Integrated Ventures

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Correlation Coefficient

Altigen Communications  Integrated Ventures

Pay attention - limited upside

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

Pair Corralation between Altigen Communications and Integrated Ventures

Given the investment horizon of 90 days Altigen Communications is expected to under-perform the Integrated Ventures. But the otc stock apears to be less risky and, when comparing its historical volatility, Altigen Communications is 6.12 times less risky than Integrated Ventures. The otc stock trades about -0.16 of its potential returns per unit of risk. The Integrated Ventures is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Integrated Ventures on October 12, 2024 and sell it today you would earn a total of  86.50  from holding Integrated Ventures or generate 2471.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.03%
Values	Daily Returns

Altigen Communications  vs.  Integrated Ventures

Altigen Communications

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Altigen Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Altigen Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Integrated Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Integrated Ventures 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 Altigen Communications and Integrated Ventures

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

The idea behind Altigen Communications and Integrated Ventures 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.