Correlation Between INtRON Biotechnology and N2Tech

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Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and N2Tech 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 INtRON Biotechnology and N2Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and N2Tech Co, you can compare the effects of market volatilities on INtRON Biotechnology and N2Tech 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 INtRON Biotechnology with a short position of N2Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and N2Tech.

Diversification Opportunities for INtRON Biotechnology and N2Tech

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between INtRON and N2Tech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and N2Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N2Tech and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with N2Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N2Tech has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and N2Tech go up and down completely randomly.

Pair Corralation between INtRON Biotechnology and N2Tech

Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 2.02 times more return on investment than N2Tech. However, INtRON Biotechnology is 2.02 times more volatile than N2Tech Co. It trades about 0.04 of its potential returns per unit of risk. N2Tech Co is currently generating about -0.04 per unit of risk. If you would invest  534,795  in iNtRON Biotechnology on October 30, 2024 and sell it today you would earn a total of  21,205  from holding iNtRON Biotechnology or generate 3.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

iNtRON Biotechnology  vs.  N2Tech Co

 Performance 
       Timeline  
iNtRON Biotechnology 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days iNtRON Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INtRON Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
N2Tech 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in N2Tech Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, N2Tech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

INtRON Biotechnology and N2Tech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with INtRON Biotechnology and N2Tech

The main advantage of trading using opposite INtRON Biotechnology and N2Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, N2Tech 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 N2Tech will offset losses from the drop in N2Tech's long position.
The idea behind iNtRON Biotechnology and N2Tech Co 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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