Correlation Between Blender Financial and Itay Financial

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

By analyzing existing cross correlation between Blender Financial Technologies and Itay Financial AA, you can compare the effects of market volatilities on Blender Financial and Itay Financial 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 Blender Financial with a short position of Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blender Financial and Itay Financial.

Diversification Opportunities for Blender Financial and Itay Financial

-0.5

Correlation Coefficient

Blender Financial  Itay Financial

Very good diversification

The 3 months correlation between Blender and Itay is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Blender Financial Technologies and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA and Blender Financial 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 Blender Financial Technologies are associated (or correlated) with Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Blender Financial i.e., Blender Financial and Itay Financial go up and down completely randomly.

Pair Corralation between Blender Financial and Itay Financial

Assuming the 90 days trading horizon Blender Financial Technologies is expected to generate 1.48 times more return on investment than Itay Financial. However, Blender Financial is 1.48 times more volatile than Itay Financial AA. It trades about 0.18 of its potential returns per unit of risk. Itay Financial AA is currently generating about 0.03 per unit of risk. If you would invest  33,700  in Blender Financial Technologies on October 12, 2024 and sell it today you would earn a total of  4,080  from holding Blender Financial Technologies or generate 12.11% return on investment over 90 days.

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

Blender Financial Technologies  vs.  Itay Financial AA

Blender Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blender Financial Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Blender Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Itay Financial AA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itay Financial AA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Itay Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blender Financial and Itay Financial

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

The idea behind Blender Financial Technologies and Itay Financial AA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.