Correlation Between Global Brands and ITEQ Corp
Can any of the company-specific risk be diversified away by investing in both Global Brands and ITEQ Corp 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 Global Brands and ITEQ Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Brands Manufacture and ITEQ Corp, you can compare the effects of market volatilities on Global Brands and ITEQ Corp 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 Global Brands with a short position of ITEQ Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Brands and ITEQ Corp.
Diversification Opportunities for Global Brands and ITEQ Corp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and ITEQ is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Global Brands Manufacture and ITEQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITEQ Corp and Global Brands 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 Global Brands Manufacture are associated (or correlated) with ITEQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITEQ Corp has no effect on the direction of Global Brands i.e., Global Brands and ITEQ Corp go up and down completely randomly.
Pair Corralation between Global Brands and ITEQ Corp
Assuming the 90 days trading horizon Global Brands Manufacture is expected to generate 0.9 times more return on investment than ITEQ Corp. However, Global Brands Manufacture is 1.11 times less risky than ITEQ Corp. It trades about 0.03 of its potential returns per unit of risk. ITEQ Corp is currently generating about 0.0 per unit of risk. If you would invest 6,400 in Global Brands Manufacture on November 28, 2024 and sell it today you would earn a total of 1,110 from holding Global Brands Manufacture or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Brands Manufacture vs. ITEQ Corp
Performance |
| Timeline |
| Global Brands Manufacture |
| ITEQ Corp |
Global Brands and ITEQ Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Brands and ITEQ Corp
The main advantage of trading using opposite Global Brands and ITEQ Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Brands position performs unexpectedly, ITEQ Corp 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 ITEQ Corp will offset losses from the drop in ITEQ Corp's long position.| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
| ITEQ Corp vs. Elite Material Co | ITEQ Corp vs. Taiwan Union Technology | ITEQ Corp vs. Unimicron Technology Corp | ITEQ Corp vs. Tripod Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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