Correlation Between I Tech and Pierce Group

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

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

Diversification Opportunities for I Tech and Pierce Group

-0.71

Correlation Coefficient

I Tech  Pierce Group

Pay attention - limited upside

The 3 months correlation between ITECH and Pierce is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Pierce Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pierce Group 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 Pierce Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pierce Group AB has no effect on the direction of I Tech i.e., I Tech and Pierce Group go up and down completely randomly.

Pair Corralation between I Tech and Pierce Group

Assuming the 90 days trading horizon I Tech is expected to generate 1.15 times more return on investment than Pierce Group. However, I Tech is 1.15 times more volatile than Pierce Group AB. It trades about 0.02 of its potential returns per unit of risk. Pierce Group AB is currently generating about 0.01 per unit of risk. If you would invest  5,434  in I Tech on October 12, 2024 and sell it today you would earn a total of  266.00  from holding I Tech or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

I Tech  vs.  Pierce Group AB

I Tech

Risk-Adjusted Performance

10 of 100

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.

Pierce Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pierce Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Pierce Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with I Tech and Pierce Group

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

The idea behind I Tech and Pierce Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.