Correlation Between Itay Financial and Photomyne
Can any of the company-specific risk be diversified away by investing in both Itay Financial and Photomyne 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 Photomyne 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 Photomyne, you can compare the effects of market volatilities on Itay Financial and Photomyne 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 Photomyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Photomyne.
Diversification Opportunities for Itay Financial and Photomyne
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Itay and Photomyne is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne 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 Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Itay Financial i.e., Itay Financial and Photomyne go up and down completely randomly.
Pair Corralation between Itay Financial and Photomyne
Assuming the 90 days trading horizon Itay Financial AA is expected to generate 9.94 times more return on investment than Photomyne. However, Itay Financial is 9.94 times more volatile than Photomyne. It trades about 0.15 of its potential returns per unit of risk. Photomyne is currently generating about 0.15 per unit of risk. If you would invest 33,190 in Itay Financial AA on December 2, 2024 and sell it today you would earn a total of 35,040 from holding Itay Financial AA or generate 105.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Itay Financial AA vs. Photomyne
Performance |
Timeline |
Itay Financial AA |
Photomyne |
Itay Financial and Photomyne Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Itay Financial and Photomyne
The main advantage of trading using opposite Itay Financial and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial position performs unexpectedly, Photomyne 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 Photomyne will offset losses from the drop in Photomyne's long position.Itay Financial vs. Global Knafaim Leasing | Itay Financial vs. Multi Retail Group | Itay Financial vs. Sure Tech Investments LP | Itay Financial vs. Blender Financial Technologies |
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Check out your portfolio center.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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