Correlation Between Catcher Technology and S Tech
Can any of the company-specific risk be diversified away by investing in both Catcher Technology and S Tech 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 Catcher Technology and S Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catcher Technology Co and S Tech Corp, you can compare the effects of market volatilities on Catcher Technology and S Tech 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 Catcher Technology with a short position of S Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and S Tech.
Diversification Opportunities for Catcher Technology and S Tech
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catcher and 1584 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and S Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Tech Corp and Catcher 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 Catcher Technology Co are associated (or correlated) with S Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Tech Corp has no effect on the direction of Catcher Technology i.e., Catcher Technology and S Tech go up and down completely randomly.
Pair Corralation between Catcher Technology and S Tech
Assuming the 90 days trading horizon Catcher Technology Co is expected to generate 0.7 times more return on investment than S Tech. However, Catcher Technology Co is 1.44 times less risky than S Tech. It trades about 0.02 of its potential returns per unit of risk. S Tech Corp is currently generating about -0.01 per unit of risk. If you would invest 18,450 in Catcher Technology Co on August 29, 2024 and sell it today you would earn a total of 1,150 from holding Catcher Technology Co or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catcher Technology Co vs. S Tech Corp
Performance |
| Timeline |
| Catcher Technology |
| S Tech Corp |
Catcher Technology and S Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catcher Technology and S Tech
The main advantage of trading using opposite Catcher Technology and S Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcher Technology position performs unexpectedly, S Tech 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 S Tech will offset losses from the drop in S Tech's long position.| Catcher Technology vs. LARGAN Precision Co | Catcher Technology vs. Delta Electronics | Catcher Technology vs. Quanta Computer | Catcher Technology vs. Pegatron Corp |
| S Tech vs. China Steel Corp | S Tech vs. Iron Force Industrial | S Tech vs. Mayer Steel Pipe | S Tech vs. Shinkong Insurance 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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