Correlation Between TTM Technologies and EMagin

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

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

Diversification Opportunities for TTM Technologies and EMagin

0.44

Correlation Coefficient

TTM Technologies  EMagin

Very weak diversification

The 3 months correlation between TTM and EMagin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding TTM Technologies and EMagin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMagin and TTM Technologies 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 TTM Technologies are associated (or correlated) with EMagin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMagin has no effect on the direction of TTM Technologies i.e., TTM Technologies and EMagin go up and down completely randomly.

Pair Corralation between TTM Technologies and EMagin

If you would invest  1,785  in TTM Technologies on September 5, 2024 and sell it today you would earn a total of  664.00  from holding TTM Technologies or generate 37.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

TTM Technologies  vs.  EMagin

TTM Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TTM Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, TTM Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

EMagin

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TTM Technologies and EMagin

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

The idea behind TTM Technologies and EMagin 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.