Correlation Between Indo Global and 12 Retech

Can any of the company-specific risk be diversified away by investing in both Indo Global and 12 Retech 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 Indo Global and 12 Retech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indo Global Exchange and 12 Retech Corp, you can compare the effects of market volatilities on Indo Global and 12 Retech 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 Indo Global with a short position of 12 Retech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Global and 12 Retech.

Diversification Opportunities for Indo Global and 12 Retech

0.0

Correlation Coefficient

Indo Global  12 Retech

Pay attention - limited upside

The 3 months correlation between Indo and RETC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange and 12 Retech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 12 Retech Corp and Indo Global 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 Indo Global Exchange are associated (or correlated) with 12 Retech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 12 Retech Corp has no effect on the direction of Indo Global i.e., Indo Global and 12 Retech go up and down completely randomly.

Pair Corralation between Indo Global and 12 Retech

If you would invest  0.36  in Indo Global Exchange on September 3, 2024 and sell it today you would lose (0.29) from holding Indo Global Exchange or give up 80.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	30.71%
Values	Daily Returns

Indo Global Exchange  vs.  12 Retech Corp

Indo Global Exchange

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Global Exchange are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Indo Global showed solid returns over the last few months and may actually be approaching a breakup point.

12 Retech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 12 Retech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 12 Retech is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Indo Global and 12 Retech

The main advantage of trading using opposite Indo Global and 12 Retech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Global position performs unexpectedly, 12 Retech 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 12 Retech will offset losses from the drop in 12 Retech's long position.

The idea behind Indo Global Exchange and 12 Retech Corp 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.