Correlation Between Flexium Interconnect and ITEQ Corp
Can any of the company-specific risk be diversified away by investing in both Flexium Interconnect 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 Flexium Interconnect and ITEQ Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexium Interconnect and ITEQ Corp, you can compare the effects of market volatilities on Flexium Interconnect 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 Flexium Interconnect with a short position of ITEQ Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexium Interconnect and ITEQ Corp.
Diversification Opportunities for Flexium Interconnect and ITEQ Corp
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flexium and ITEQ is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and ITEQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITEQ Corp and Flexium Interconnect 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 Flexium Interconnect 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 Flexium Interconnect i.e., Flexium Interconnect and ITEQ Corp go up and down completely randomly.
Pair Corralation between Flexium Interconnect and ITEQ Corp
Assuming the 90 days trading horizon Flexium Interconnect is expected to under-perform the ITEQ Corp. In addition to that, Flexium Interconnect is 1.05 times more volatile than ITEQ Corp. It trades about -0.24 of its total potential returns per unit of risk. ITEQ Corp is currently generating about -0.09 per unit of volatility. If you would invest 7,890 in ITEQ Corp on September 2, 2024 and sell it today you would lose (350.00) from holding ITEQ Corp or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexium Interconnect vs. ITEQ Corp
Performance |
| Timeline |
| Flexium Interconnect |
| ITEQ Corp |
Flexium Interconnect and ITEQ Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexium Interconnect and ITEQ Corp
The main advantage of trading using opposite Flexium Interconnect and ITEQ Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexium Interconnect 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.The idea behind Flexium Interconnect and ITEQ Corp 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.| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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