Correlation Between Newretail and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Newretail and Integrated Service 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 Newretail and Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Integrated Service Technology, you can compare the effects of market volatilities on Newretail and Integrated Service 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 Newretail with a short position of Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Integrated Service.
Diversification Opportunities for Newretail and Integrated Service
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newretail and Integrated is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and Newretail 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 Newretail Co are associated (or correlated) with Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Newretail i.e., Newretail and Integrated Service go up and down completely randomly.
Pair Corralation between Newretail and Integrated Service
Assuming the 90 days trading horizon Newretail is expected to generate 1.21 times less return on investment than Integrated Service. In addition to that, Newretail is 1.43 times more volatile than Integrated Service Technology. It trades about 0.03 of its total potential returns per unit of risk. Integrated Service Technology is currently generating about 0.06 per unit of volatility. If you would invest 8,017 in Integrated Service Technology on August 24, 2024 and sell it today you would earn a total of 6,433 from holding Integrated Service Technology or generate 80.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Newretail Co vs. Integrated Service Technology
Performance |
| Timeline |
| Newretail |
| Integrated Service |
Newretail and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Integrated Service
The main advantage of trading using opposite Newretail and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Newretail vs. Addcn Technology Co | Newretail vs. PChome Online | Newretail vs. Sunfun Info Co | Newretail vs. Taiwan Taomee Co |
| Integrated Service vs. Global Unichip Corp | Integrated Service vs. Asmedia Technology | Integrated Service vs. Unimicron Technology Corp | Integrated Service vs. Novatek Microelectronics Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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