Correlation Between Cameo Communications and Intech Biopharm
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Intech Biopharm 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 Cameo Communications and Intech Biopharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Intech Biopharm, you can compare the effects of market volatilities on Cameo Communications and Intech Biopharm 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 Cameo Communications with a short position of Intech Biopharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Intech Biopharm.
Diversification Opportunities for Cameo Communications and Intech Biopharm
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cameo and Intech is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Intech Biopharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Biopharm and Cameo Communications 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 Cameo Communications are associated (or correlated) with Intech Biopharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Biopharm has no effect on the direction of Cameo Communications i.e., Cameo Communications and Intech Biopharm go up and down completely randomly.
Pair Corralation between Cameo Communications and Intech Biopharm
Assuming the 90 days trading horizon Cameo Communications is expected to under-perform the Intech Biopharm. In addition to that, Cameo Communications is 2.17 times more volatile than Intech Biopharm. It trades about -0.12 of its total potential returns per unit of risk. Intech Biopharm is currently generating about -0.14 per unit of volatility. If you would invest 2,810 in Intech Biopharm on September 2, 2024 and sell it today you would lose (100.00) from holding Intech Biopharm or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Intech Biopharm
Performance |
| Timeline |
| Cameo Communications |
| Intech Biopharm |
Cameo Communications and Intech Biopharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Intech Biopharm
The main advantage of trading using opposite Cameo Communications and Intech Biopharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Intech Biopharm 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 Intech Biopharm will offset losses from the drop in Intech Biopharm's long position.The idea behind Cameo Communications and Intech Biopharm pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Intech Biopharm vs. Arima Communications Corp | Intech Biopharm vs. Dimerco Data System | Intech Biopharm vs. WinMate Communication INC | Intech Biopharm vs. Mercuries Data Systems |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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