Correlation Between EMagin and TTM Technologies

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

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

Diversification Opportunities for EMagin and TTM Technologies

0.44

Correlation Coefficient

EMagin  TTM Technologies

Very weak diversification

The 3 months correlation between EMagin and TTM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding EMagin and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies and EMagin 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 EMagin are associated (or correlated) with TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of EMagin i.e., EMagin and TTM Technologies go up and down completely randomly.

Pair Corralation between EMagin and TTM Technologies

If you would invest  1,785  in TTM Technologies on September 5, 2024 and sell it today you would earn a total of  664.00  from holding TTM Technologies or generate 37.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

EMagin  vs.  TTM Technologies

EMagin

Risk-Adjusted Performance

0 of 100

Very Weak

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

TTM Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TTM Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, TTM Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMagin and TTM Technologies

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

The idea behind EMagin and TTM Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.