Correlation Between Mobile Max and TAT Technologies

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

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

Diversification Opportunities for Mobile Max and TAT Technologies

0.69

Correlation Coefficient

Mobile Max  TAT Technologies

Poor diversification

The 3 months correlation between Mobile and TAT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Max M and TAT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAT Technologies and Mobile Max 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 Mobile Max M are associated (or correlated) with TAT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAT Technologies has no effect on the direction of Mobile Max i.e., Mobile Max and TAT Technologies go up and down completely randomly.

Pair Corralation between Mobile Max and TAT Technologies

Assuming the 90 days trading horizon Mobile Max M is expected to generate 1.13 times more return on investment than TAT Technologies. However, Mobile Max is 1.13 times more volatile than TAT Technologies. It trades about 0.1 of its potential returns per unit of risk. TAT Technologies is currently generating about 0.02 per unit of risk. If you would invest  3,400  in Mobile Max M on December 27, 2024 and sell it today you would earn a total of  540.00  from holding Mobile Max M or generate 15.88% return on investment over 90 days.

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

Mobile Max M  vs.  TAT Technologies

Mobile Max M

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Max M are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobile Max sustained solid returns over the last few months and may actually be approaching a breakup point.

TAT Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TAT Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TAT Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mobile Max and TAT Technologies

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

The idea behind Mobile Max M and TAT Technologies 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.