Correlation Between ITM Semiconductor and People Technology
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and People Technology 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 People Technology 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 People Technology, you can compare the effects of market volatilities on ITM Semiconductor and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and People Technology.
Diversification Opportunities for ITM Semiconductor and People Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITM and People is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and People Technology go up and down completely randomly.
Pair Corralation between ITM Semiconductor and People Technology
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the People Technology. But the stock apears to be less risky and, when comparing its historical volatility, ITM Semiconductor Co is 1.04 times less risky than People Technology. The stock trades about -0.03 of its potential returns per unit of risk. The People Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,136,151 in People Technology on November 27, 2024 and sell it today you would lose (196,151) from holding People Technology or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. People Technology
Performance |
| Timeline |
| ITM Semiconductor |
| People Technology |
ITM Semiconductor and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and People Technology
The main advantage of trading using opposite ITM Semiconductor and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| ITM Semiconductor vs. SS TECH | ITM Semiconductor vs. LEENO Industrial | ITM Semiconductor vs. Wonik Ips Co | ITM Semiconductor vs. SFA Semicon Co |
| People Technology vs. Hotel Shilla Co | People Technology vs. JYP Entertainment Corp | People Technology vs. Kaonmedia Co | People Technology vs. Nasmedia Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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