Correlation Between Arctic Blue and I Tech
Can any of the company-specific risk be diversified away by investing in both Arctic Blue and I Tech 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 Arctic Blue and I Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Blue Beverages and I Tech, you can compare the effects of market volatilities on Arctic Blue and I Tech 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 Arctic Blue with a short position of I Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and I Tech.
Diversification Opportunities for Arctic Blue and I Tech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arctic and ITECH is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Arctic Blue i.e., Arctic Blue and I Tech go up and down completely randomly.
Pair Corralation between Arctic Blue and I Tech
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the I Tech. In addition to that, Arctic Blue is 1.17 times more volatile than I Tech. It trades about -0.43 of its total potential returns per unit of risk. I Tech is currently generating about 0.03 per unit of volatility. If you would invest 4,840 in I Tech on August 30, 2024 and sell it today you would earn a total of 60.00 from holding I Tech or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Blue Beverages vs. I Tech
Performance |
| Timeline |
| Arctic Blue Beverages |
| I Tech |
Arctic Blue and I Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Blue and I Tech
The main advantage of trading using opposite Arctic Blue and I Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, I Tech 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 I Tech will offset losses from the drop in I Tech's long position.| Arctic Blue vs. Cint Group AB | Arctic Blue vs. Nordic Waterproofing Holding | Arctic Blue vs. RVRC Holding AB | Arctic Blue vs. Inwido AB |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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