Correlation Between Alligator Bioscience and I Tech

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

By analyzing existing cross correlation between Alligator Bioscience AB and I Tech, you can compare the effects of market volatilities on Alligator Bioscience and I Tech 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 Alligator Bioscience with a short position of I Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alligator Bioscience and I Tech.

Diversification Opportunities for Alligator Bioscience and I Tech

-0.34

Correlation Coefficient

Alligator Bioscience  I Tech

Very good diversification

The 3 months correlation between Alligator and ITECH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alligator Bioscience AB and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech and Alligator Bioscience 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 Alligator Bioscience AB are associated (or correlated) with I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Alligator Bioscience i.e., Alligator Bioscience and I Tech go up and down completely randomly.

Pair Corralation between Alligator Bioscience and I Tech

Assuming the 90 days trading horizon Alligator Bioscience AB is expected to under-perform the I Tech. In addition to that, Alligator Bioscience is 5.7 times more volatile than I Tech. It trades about -0.14 of its total potential returns per unit of risk. I Tech is currently generating about 0.49 per unit of volatility. If you would invest  4,520  in I Tech on September 23, 2024 and sell it today you would earn a total of  1,280  from holding I Tech or generate 28.32% return on investment over 90 days.

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

Alligator Bioscience AB  vs.  I Tech

Alligator Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alligator Bioscience AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

I Tech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, I Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alligator Bioscience and I Tech

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

The idea behind Alligator Bioscience AB and I Tech 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.