Correlation Between I Tech and OssDsign

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

By analyzing existing cross correlation between I Tech and OssDsign AB, you can compare the effects of market volatilities on I Tech and OssDsign 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 OssDsign. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and OssDsign.

Diversification Opportunities for I Tech and OssDsign

0.64

Correlation Coefficient

I Tech  OssDsign

Poor diversification

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

Pair Corralation between I Tech and OssDsign

Assuming the 90 days trading horizon I Tech is expected to generate 1.25 times more return on investment than OssDsign. However, I Tech is 1.25 times more volatile than OssDsign AB. It trades about 0.49 of its potential returns per unit of risk. OssDsign AB is currently generating about 0.52 per unit of risk. If you would invest  4,520  in I Tech on September 23, 2024 and sell it today you would earn a total of  1,280  from holding I Tech or generate 28.32% return on investment over 90 days.

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

I Tech  vs.  OssDsign AB

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.

OssDsign AB

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OssDsign AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OssDsign unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with I Tech and OssDsign

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

The idea behind I Tech and OssDsign 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.