Correlation Between Itcen and System
Can any of the company-specific risk be diversified away by investing in both Itcen and System 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 Itcen and System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itcen Co and System and Application, you can compare the effects of market volatilities on Itcen and System 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 Itcen with a short position of System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itcen and System.
Diversification Opportunities for Itcen and System
Good diversification
The 3 months correlation between Itcen and System is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Itcen Co and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application and Itcen 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 Itcen Co are associated (or correlated) with System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Itcen i.e., Itcen and System go up and down completely randomly.
Pair Corralation between Itcen and System
Assuming the 90 days trading horizon Itcen Co is expected to under-perform the System. In addition to that, Itcen is 1.26 times more volatile than System and Application. It trades about -0.09 of its total potential returns per unit of risk. System and Application is currently generating about 0.23 per unit of volatility. If you would invest 148,177 in System and Application on October 14, 2024 and sell it today you would earn a total of 18,423 from holding System and Application or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itcen Co vs. System and Application
Performance |
| Timeline |
| Itcen |
| System and Application |
Itcen and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itcen and System
The main advantage of trading using opposite Itcen and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itcen position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Itcen vs. Pan Entertainment Co | Itcen vs. SAMG Entertainment Co | Itcen vs. Alton Sports CoLtd | Itcen vs. Daou Data Corp |
| System vs. Automobile Pc | System vs. Chorokbaem Healthcare Co | System vs. Shinhan Inverse Silver | System vs. Tuksu Engineering ConstructionLtd |
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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