Correlation Between I Tech and Chordate Medical

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

By analyzing existing cross correlation between I Tech and Chordate Medical Holding, you can compare the effects of market volatilities on I Tech and Chordate Medical 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 Tech with a short position of Chordate Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and Chordate Medical.

Diversification Opportunities for I Tech and Chordate Medical

-0.41

Correlation Coefficient

I Tech  Chordate Medical

Very good diversification

The 3 months correlation between ITECH and Chordate is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Chordate Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chordate Medical Holding and I Tech 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 Tech are associated (or correlated) with Chordate Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chordate Medical Holding has no effect on the direction of I Tech i.e., I Tech and Chordate Medical go up and down completely randomly.

Pair Corralation between I Tech and Chordate Medical

Assuming the 90 days trading horizon I Tech is expected to generate 0.64 times more return on investment than Chordate Medical. However, I Tech is 1.56 times less risky than Chordate Medical. It trades about 0.13 of its potential returns per unit of risk. Chordate Medical Holding is currently generating about -0.58 per unit of risk. If you would invest  5,100  in I Tech on September 23, 2024 and sell it today you would earn a total of  700.00  from holding I Tech or generate 13.73% return on investment over 90 days.

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

I Tech  vs.  Chordate Medical Holding

I Tech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, I Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chordate Medical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chordate Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with I Tech and Chordate Medical

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

The idea behind I Tech and Chordate Medical Holding 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.