Correlation Between I Tail and Klinique Med

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

By analyzing existing cross correlation between i Tail Corp PCL and The Klinique Med, you can compare the effects of market volatilities on I Tail and Klinique Med 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 I Tail with a short position of Klinique Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tail and Klinique Med.

Diversification Opportunities for I Tail and Klinique Med

0.25

Correlation Coefficient

I Tail  Klinique Med

Modest diversification

The 3 months correlation between ITC and Klinique is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding i Tail Corp PCL and The Klinique Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klinique Med and I Tail 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 i Tail Corp PCL are associated (or correlated) with Klinique Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klinique Med has no effect on the direction of I Tail i.e., I Tail and Klinique Med go up and down completely randomly.

Pair Corralation between I Tail and Klinique Med

Assuming the 90 days trading horizon i Tail Corp PCL is expected to under-perform the Klinique Med. But the stock apears to be less risky and, when comparing its historical volatility, i Tail Corp PCL is 1.04 times less risky than Klinique Med. The stock trades about -0.21 of its potential returns per unit of risk. The The Klinique Med is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,250  in The Klinique Med on December 30, 2024 and sell it today you would lose (300.00) from holding The Klinique Med or give up 9.23% of portfolio value over 90 days.

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

i Tail Corp PCL  vs.  The Klinique Med

i Tail Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days i Tail Corp PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Klinique Med

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Klinique Med has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with I Tail and Klinique Med

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

The idea behind i Tail Corp PCL and The Klinique Med 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..