Correlation Between I Tail and Sappe Public

Can any of the company-specific risk be diversified away by investing in both I Tail and Sappe Public 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 Sappe Public 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 Sappe Public, you can compare the effects of market volatilities on I Tail and Sappe Public 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 Sappe Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tail and Sappe Public.

Diversification Opportunities for I Tail and Sappe Public

0.73

Correlation Coefficient

I Tail  Sappe Public

Poor diversification

The 3 months correlation between ITC and Sappe is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding i Tail Corp PCL and Sappe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappe Public 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 Sappe Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappe Public has no effect on the direction of I Tail i.e., I Tail and Sappe Public go up and down completely randomly.

Pair Corralation between I Tail and Sappe Public

Assuming the 90 days trading horizon i Tail Corp PCL is expected to generate 0.95 times more return on investment than Sappe Public. However, i Tail Corp PCL is 1.05 times less risky than Sappe Public. It trades about -0.21 of its potential returns per unit of risk. Sappe Public is currently generating about -0.33 per unit of risk. If you would invest  2,136  in i Tail Corp PCL on December 29, 2024 and sell it today you would lose (726.00) from holding i Tail Corp PCL or give up 33.99% of portfolio value over 90 days.

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

i Tail Corp PCL  vs.  Sappe Public

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.

Sappe Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sappe Public 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 drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with I Tail and Sappe Public

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

The idea behind i Tail Corp PCL and Sappe 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.