Correlation Between Itcen and Raontech
Can any of the company-specific risk be diversified away by investing in both Itcen and Raontech 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 Raontech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itcen Co and Raontech, you can compare the effects of market volatilities on Itcen and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itcen and Raontech.
Diversification Opportunities for Itcen and Raontech
Modest diversification
The 3 months correlation between Itcen and Raontech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Itcen Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Itcen i.e., Itcen and Raontech go up and down completely randomly.
Pair Corralation between Itcen and Raontech
Assuming the 90 days trading horizon Itcen Co is expected to generate 0.94 times more return on investment than Raontech. However, Itcen Co is 1.06 times less risky than Raontech. It trades about 0.03 of its potential returns per unit of risk. Raontech is currently generating about 0.01 per unit of risk. If you would invest 417,000 in Itcen Co on October 13, 2024 and sell it today you would earn a total of 119,000 from holding Itcen Co or generate 28.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.78% |
| Values | Daily Returns |
Itcen Co vs. Raontech
Performance |
| Timeline |
| Itcen |
| Raontech |
Itcen and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itcen and Raontech
The main advantage of trading using opposite Itcen and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itcen position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Itcen vs. Pan Entertainment Co | Itcen vs. SAMG Entertainment Co | Itcen vs. Alton Sports CoLtd | Itcen vs. Daou Data Corp |
| Raontech vs. EV Advanced Material | Raontech vs. PI Advanced Materials | Raontech vs. Kolon Plastics | Raontech vs. Ecoplastic |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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