Correlation Between I Tech and OptiCept Technologies

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Can any of the company-specific risk be diversified away by investing in both I Tech and OptiCept Technologies 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 OptiCept Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Tech and OptiCept Technologies AB, you can compare the effects of market volatilities on I Tech and OptiCept Technologies 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 OptiCept Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and OptiCept Technologies.

Diversification Opportunities for I Tech and OptiCept Technologies

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between ITECH and OptiCept is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies 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 OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of I Tech i.e., I Tech and OptiCept Technologies go up and down completely randomly.

Pair Corralation between I Tech and OptiCept Technologies

Assuming the 90 days trading horizon I Tech is expected to generate 1.12 times more return on investment than OptiCept Technologies. However, I Tech is 1.12 times more volatile than OptiCept Technologies AB. It trades about 0.43 of its potential returns per unit of risk. OptiCept Technologies AB is currently generating about -0.06 per unit of risk. If you would invest  4,780  in I Tech on September 27, 2024 and sell it today you would earn a total of  1,020  from holding I Tech or generate 21.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

I Tech  vs.  OptiCept Technologies AB

 Performance 
       Timeline  
I Tech 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 10 (%) 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.
OptiCept Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OptiCept Technologies AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

I Tech and OptiCept Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with I Tech and OptiCept Technologies

The main advantage of trading using opposite I Tech and OptiCept Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Tech position performs unexpectedly, OptiCept Technologies 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 OptiCept Technologies will offset losses from the drop in OptiCept Technologies' long position.
The idea behind I Tech and OptiCept Technologies AB 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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