Correlation Between POT and Idico JSC

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

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

Diversification Opportunities for POT and Idico JSC

0.0

Correlation Coefficient

POT  Idico JSC

Pay attention - limited upside

The 3 months correlation between POT and Idico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PostTelecommunication Equipmen and Idico JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idico JSC and POT 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 PostTelecommunication Equipment are associated (or correlated) with Idico JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idico JSC has no effect on the direction of POT i.e., POT and Idico JSC go up and down completely randomly.

Pair Corralation between POT and Idico JSC

If you would invest  1,660,000  in PostTelecommunication Equipment on December 25, 2024 and sell it today you would lose (30,000) from holding PostTelecommunication Equipment or give up 1.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PostTelecommunication Equipmen  vs.  Idico JSC

PostTelecommunication

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PostTelecommunication Equipment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, POT is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Idico JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Idico JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Idico JSC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with POT and Idico JSC

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

The idea behind PostTelecommunication Equipment and Idico JSC 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.