Correlation Between Intouch Holdings and SNC Former

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

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

Diversification Opportunities for Intouch Holdings and SNC Former

0.64

Correlation Coefficient

Intouch Holdings  SNC Former

Poor diversification

The 3 months correlation between Intouch and SNC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings Public and SNC Former Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Former Public and Intouch Holdings 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 Intouch Holdings Public are associated (or correlated) with SNC Former. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Former Public has no effect on the direction of Intouch Holdings i.e., Intouch Holdings and SNC Former go up and down completely randomly.

Pair Corralation between Intouch Holdings and SNC Former

Assuming the 90 days trading horizon Intouch Holdings is expected to generate 29.65 times less return on investment than SNC Former. But when comparing it to its historical volatility, Intouch Holdings Public is 46.64 times less risky than SNC Former. It trades about 0.13 of its potential returns per unit of risk. SNC Former Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  645.00  in SNC Former Public on October 7, 2024 and sell it today you would lose (75.00) from holding SNC Former Public or give up 11.63% of portfolio value over 90 days.

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

Intouch Holdings Public  vs.  SNC Former Public

Intouch Holdings Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

SNC Former Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNC Former Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, SNC Former is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Intouch Holdings and SNC Former

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

The idea behind Intouch Holdings Public and SNC Former Public 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.