Correlation Between Tainet Communication and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both Tainet Communication and Posiflex Technology 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 Tainet Communication and Posiflex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and Posiflex Technology, you can compare the effects of market volatilities on Tainet Communication and Posiflex Technology 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 Tainet Communication with a short position of Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and Posiflex Technology.
Diversification Opportunities for Tainet Communication and Posiflex Technology
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tainet and Posiflex is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex Technology and Tainet Communication 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 Tainet Communication System are associated (or correlated) with Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of Tainet Communication i.e., Tainet Communication and Posiflex Technology go up and down completely randomly.
Pair Corralation between Tainet Communication and Posiflex Technology
Assuming the 90 days trading horizon Tainet Communication is expected to generate 1.84 times less return on investment than Posiflex Technology. In addition to that, Tainet Communication is 1.37 times more volatile than Posiflex Technology. It trades about 0.05 of its total potential returns per unit of risk. Posiflex Technology is currently generating about 0.13 per unit of volatility. If you would invest 11,100 in Posiflex Technology on August 31, 2024 and sell it today you would earn a total of 19,950 from holding Posiflex Technology or generate 179.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainet Communication System vs. Posiflex Technology
Performance |
| Timeline |
| Tainet Communication |
| Posiflex Technology |
Tainet Communication and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and Posiflex Technology
The main advantage of trading using opposite Tainet Communication and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication position performs unexpectedly, Posiflex Technology 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 Posiflex Technology will offset losses from the drop in Posiflex Technology's long position.| Tainet Communication vs. Union Insurance Co | Tainet Communication vs. Mercuries Life Insurance | Tainet Communication vs. Evermore Chemical Industry | Tainet Communication vs. Central Reinsurance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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