Correlation Between TTEC Holdings and Science Applications

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

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

Diversification Opportunities for TTEC Holdings and Science Applications

0.42

Correlation Coefficient

TTEC Holdings  Science Applications

Very weak diversification

The 3 months correlation between TTEC and Science is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding TTEC Holdings and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications and TTEC Holdings 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 TTEC Holdings are associated (or correlated) with Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of TTEC Holdings i.e., TTEC Holdings and Science Applications go up and down completely randomly.

Pair Corralation between TTEC Holdings and Science Applications

Given the investment horizon of 90 days TTEC Holdings is expected to generate 2.86 times more return on investment than Science Applications. However, TTEC Holdings is 2.86 times more volatile than Science Applications International. It trades about 0.03 of its potential returns per unit of risk. Science Applications International is currently generating about -0.02 per unit of risk. If you would invest  511.00  in TTEC Holdings on August 30, 2024 and sell it today you would earn a total of  3.00  from holding TTEC Holdings or generate 0.59% return on investment over 90 days.

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

TTEC Holdings  vs.  Science Applications Internati

TTEC Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TTEC Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, TTEC Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Science Applications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Science Applications International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Science Applications is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TTEC Holdings and Science Applications

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

The idea behind TTEC Holdings and Science Applications International 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.