Correlation Between People Technology and Tesna
Can any of the company-specific risk be diversified away by investing in both People Technology and Tesna 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 People Technology and Tesna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and Tesna Inc, you can compare the effects of market volatilities on People Technology and Tesna 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 People Technology with a short position of Tesna. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and Tesna.
Diversification Opportunities for People Technology and Tesna
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between People and Tesna is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and Tesna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesna Inc and People Technology 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 People Technology are associated (or correlated) with Tesna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesna Inc has no effect on the direction of People Technology i.e., People Technology and Tesna go up and down completely randomly.
Pair Corralation between People Technology and Tesna
Assuming the 90 days trading horizon People Technology is expected to generate 16.75 times less return on investment than Tesna. But when comparing it to its historical volatility, People Technology is 1.96 times less risky than Tesna. It trades about 0.03 of its potential returns per unit of risk. Tesna Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,650,000 in Tesna Inc on October 20, 2024 and sell it today you would earn a total of 635,000 from holding Tesna Inc or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. Tesna Inc
Performance |
| Timeline |
| People Technology |
| Tesna Inc |
People Technology and Tesna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and Tesna
The main advantage of trading using opposite People Technology and Tesna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology position performs unexpectedly, Tesna 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 Tesna will offset losses from the drop in Tesna's long position.| People Technology vs. Inzi Display CoLtd | People Technology vs. Nice Information Telecommunication | People Technology vs. BIT Computer Co | People Technology vs. Jeil Steel Mfg |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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