Correlation Between Total Soft and Itcen
Can any of the company-specific risk be diversified away by investing in both Total Soft and Itcen 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 Total Soft and Itcen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Itcen Co, you can compare the effects of market volatilities on Total Soft and Itcen 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 Total Soft with a short position of Itcen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Itcen.
Diversification Opportunities for Total Soft and Itcen
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Total and Itcen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen and Total Soft 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 Total Soft Bank are associated (or correlated) with Itcen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen has no effect on the direction of Total Soft i.e., Total Soft and Itcen go up and down completely randomly.
Pair Corralation between Total Soft and Itcen
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 0.98 times more return on investment than Itcen. However, Total Soft Bank is 1.02 times less risky than Itcen. It trades about 0.05 of its potential returns per unit of risk. Itcen Co is currently generating about 0.03 per unit of risk. If you would invest 452,500 in Total Soft Bank on November 7, 2024 and sell it today you would earn a total of 290,500 from holding Total Soft Bank or generate 64.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Total Soft Bank vs. Itcen Co
Performance |
| Timeline |
| Total Soft Bank |
| Itcen |
Total Soft and Itcen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Itcen
The main advantage of trading using opposite Total Soft and Itcen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, Itcen 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 Itcen will offset losses from the drop in Itcen's long position.| Total Soft vs. Dongwoon Anatech Co | Total Soft vs. Narae Nanotech Corp | Total Soft vs. ADTechnology CoLtd | Total Soft vs. DONGKUK TED METAL |
| Itcen vs. Samsung Electronics Co | Itcen vs. Samsung Electronics Co | Itcen vs. Hyundai Motor Co | Itcen vs. Hyundai Motor |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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