Correlation Between Tat Techno and PMI

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

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

Diversification Opportunities for Tat Techno and PMI

-0.45

Correlation Coefficient

Tat Techno  PMI

Very good diversification

The 3 months correlation between Tat and PMI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and The PMI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMI Group and Tat Techno 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 Tat Techno are associated (or correlated) with PMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMI Group has no effect on the direction of Tat Techno i.e., Tat Techno and PMI go up and down completely randomly.

Pair Corralation between Tat Techno and PMI

Given the investment horizon of 90 days Tat Techno is expected to generate 0.31 times more return on investment than PMI. However, Tat Techno is 3.2 times less risky than PMI. It trades about 0.25 of its potential returns per unit of risk. The PMI Group is currently generating about -0.13 per unit of risk. If you would invest  1,842  in Tat Techno on October 25, 2024 and sell it today you would earn a total of  1,238  from holding Tat Techno or generate 67.21% return on investment over 90 days.

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

Tat Techno  vs.  The PMI Group

Tat Techno

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tat Techno are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tat Techno unveiled solid returns over the last few months and may actually be approaching a breakup point.

PMI Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The PMI Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Tat Techno and PMI

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

The idea behind Tat Techno and The PMI Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.