Correlation Between Technology One and Duketon Mining

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

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

Diversification Opportunities for Technology One and Duketon Mining

-0.73

Correlation Coefficient

Technology One  Duketon Mining

Pay attention - limited upside

The 3 months correlation between Technology and Duketon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Technology One and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining and Technology One 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 Technology One are associated (or correlated) with Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of Technology One i.e., Technology One and Duketon Mining go up and down completely randomly.

Pair Corralation between Technology One and Duketon Mining

Assuming the 90 days trading horizon Technology One is expected to generate 0.61 times more return on investment than Duketon Mining. However, Technology One is 1.64 times less risky than Duketon Mining. It trades about -0.12 of its potential returns per unit of risk. Duketon Mining is currently generating about -0.24 per unit of risk. If you would invest  3,155  in Technology One on October 8, 2024 and sell it today you would lose (89.00) from holding Technology One or give up 2.82% of portfolio value over 90 days.

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

Technology One  vs.  Duketon Mining

Technology One

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology One are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Technology One unveiled solid returns over the last few months and may actually be approaching a breakup point.

Duketon Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duketon Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Technology One and Duketon Mining

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

The idea behind Technology One and Duketon Mining 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.