Correlation Between Identillect Technologies and Fintech Select

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

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

Diversification Opportunities for Identillect Technologies and Fintech Select

0.08

Correlation Coefficient

Identillect Technologies  Fintech Select

Significant diversification

The 3 months correlation between Identillect and Fintech is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Identillect Technologies Corp and Fintech Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fintech Select and Identillect Technologies 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 Identillect Technologies Corp are associated (or correlated) with Fintech Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fintech Select has no effect on the direction of Identillect Technologies i.e., Identillect Technologies and Fintech Select go up and down completely randomly.

Pair Corralation between Identillect Technologies and Fintech Select

Given the investment horizon of 90 days Identillect Technologies Corp is expected to generate 2.72 times more return on investment than Fintech Select. However, Identillect Technologies is 2.72 times more volatile than Fintech Select. It trades about 0.14 of its potential returns per unit of risk. Fintech Select is currently generating about 0.08 per unit of risk. If you would invest  0.50  in Identillect Technologies Corp on December 24, 2024 and sell it today you would earn a total of  0.00  from holding Identillect Technologies Corp or generate 0.0% return on investment over 90 days.

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

Identillect Technologies Corp  vs.  Fintech Select

Identillect Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Identillect Technologies Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Identillect Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Fintech Select

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fintech Select are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Fintech Select showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Identillect Technologies and Fintech Select

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

The idea behind Identillect Technologies Corp and Fintech Select 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 Transaction History module to view history of all your transactions and understand their impact on performance.