Correlation Between Itay Financial and Brack Capit

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

By analyzing existing cross correlation between Itay Financial AA and Brack Capit N, you can compare the effects of market volatilities on Itay Financial and Brack Capit 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 Itay Financial with a short position of Brack Capit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Brack Capit.

Diversification Opportunities for Itay Financial and Brack Capit

-0.44

Correlation Coefficient

Itay Financial  Brack Capit

Very good diversification

The 3 months correlation between Itay and Brack is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Brack Capit N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brack Capit N and Itay Financial 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 Itay Financial AA are associated (or correlated) with Brack Capit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brack Capit N has no effect on the direction of Itay Financial i.e., Itay Financial and Brack Capit go up and down completely randomly.

Pair Corralation between Itay Financial and Brack Capit

Assuming the 90 days trading horizon Itay Financial AA is expected to generate 1.12 times more return on investment than Brack Capit. However, Itay Financial is 1.12 times more volatile than Brack Capit N. It trades about 0.12 of its potential returns per unit of risk. Brack Capit N is currently generating about 0.02 per unit of risk. If you would invest  24,000  in Itay Financial AA on October 10, 2024 and sell it today you would earn a total of  15,200  from holding Itay Financial AA or generate 63.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.95%
Values	Daily Returns

Itay Financial AA  vs.  Brack Capit N

Itay Financial AA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itay Financial AA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Itay Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Brack Capit N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brack Capit N has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Itay Financial and Brack Capit

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

The idea behind Itay Financial AA and Brack Capit N 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..