Correlation Between ITM Semiconductor and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Atinum Investment 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 ITM Semiconductor and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Atinum Investment Co, you can compare the effects of market volatilities on ITM Semiconductor and Atinum Investment 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 ITM Semiconductor with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Atinum Investment.
Diversification Opportunities for ITM Semiconductor and Atinum Investment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITM and Atinum is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Atinum Investment go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Atinum Investment
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to generate 3.04 times more return on investment than Atinum Investment. However, ITM Semiconductor is 3.04 times more volatile than Atinum Investment Co. It trades about -0.15 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.61 per unit of risk. If you would invest 1,320,000 in ITM Semiconductor Co on November 7, 2024 and sell it today you would lose (102,000) from holding ITM Semiconductor Co or give up 7.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Atinum Investment Co
Performance |
| Timeline |
| ITM Semiconductor |
| Atinum Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ITM Semiconductor and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Atinum Investment
The main advantage of trading using opposite ITM Semiconductor and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.The idea behind ITM Semiconductor Co and Atinum Investment 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.| Atinum Investment vs. MediaZen | Atinum Investment vs. SKONEC Entertainment Co | Atinum Investment vs. Puloon Technology | Atinum Investment vs. Mobileleader CoLtd |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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