Correlation Between Intevac and Dover

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

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

Diversification Opportunities for Intevac and Dover

-0.67

Correlation Coefficient

Intevac  Dover

Excellent diversification

The 3 months correlation between Intevac and Dover is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Dover in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dover and Intevac 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 Intevac are associated (or correlated) with Dover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dover has no effect on the direction of Intevac i.e., Intevac and Dover go up and down completely randomly.

Pair Corralation between Intevac and Dover

Given the investment horizon of 90 days Intevac is expected to under-perform the Dover. In addition to that, Intevac is 2.58 times more volatile than Dover. It trades about -0.08 of its total potential returns per unit of risk. Dover is currently generating about 0.16 per unit of volatility. If you would invest  17,980  in Dover on September 3, 2024 and sell it today you would earn a total of  2,610  from holding Dover or generate 14.52% return on investment over 90 days.

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

Intevac  vs.  Dover

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dover

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dover are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Dover showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intevac and Dover

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

The idea behind Intevac and Dover 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.