Correlation Between Taylor Devices and Intevac

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

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

Diversification Opportunities for Taylor Devices and Intevac

0.33

Correlation Coefficient

Taylor Devices  Intevac

Weak diversification

The 3 months correlation between Taylor and Intevac is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Devices and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and Taylor Devices 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 Taylor Devices are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Taylor Devices i.e., Taylor Devices and Intevac go up and down completely randomly.

Pair Corralation between Taylor Devices and Intevac

Given the investment horizon of 90 days Taylor Devices is expected to under-perform the Intevac. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Devices is 1.01 times less risky than Intevac. The stock trades about -0.1 of its potential returns per unit of risk. The Intevac is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  327.00  in Intevac on September 15, 2024 and sell it today you would earn a total of  18.00  from holding Intevac or generate 5.5% return on investment over 90 days.

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

Taylor Devices  vs.  Intevac

Taylor Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taylor Devices 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.

Intevac

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Taylor Devices and Intevac

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

The idea behind Taylor Devices and Intevac 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.