Correlation Between Altigen Communications and SITO Mobile
Can any of the company-specific risk be diversified away by investing in both Altigen Communications and SITO Mobile 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 Altigen Communications and SITO Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altigen Communications and SITO Mobile, you can compare the effects of market volatilities on Altigen Communications and SITO Mobile 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 Altigen Communications with a short position of SITO Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altigen Communications and SITO Mobile.
Diversification Opportunities for Altigen Communications and SITO Mobile
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altigen and SITO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Altigen Communications and SITO Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITO Mobile and Altigen 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 Altigen Communications are associated (or correlated) with SITO Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITO Mobile has no effect on the direction of Altigen Communications i.e., Altigen Communications and SITO Mobile go up and down completely randomly.
Pair Corralation between Altigen Communications and SITO Mobile
Given the investment horizon of 90 days Altigen Communications is expected to under-perform the SITO Mobile. But the otc stock apears to be less risky and, when comparing its historical volatility, Altigen Communications is 4.0 times less risky than SITO Mobile. The otc stock trades about -0.1 of its potential returns per unit of risk. The SITO Mobile is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.03 in SITO Mobile on August 27, 2024 and sell it today you would earn a total of 0.18 from holding SITO Mobile or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Altigen Communications vs. SITO Mobile
Performance |
| Timeline |
| Altigen Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SITO Mobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Altigen Communications and SITO Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altigen Communications and SITO Mobile
The main advantage of trading using opposite Altigen Communications and SITO Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altigen Communications position performs unexpectedly, SITO Mobile 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 SITO Mobile will offset losses from the drop in SITO Mobile's long position.| Altigen Communications vs. Aware Inc | Altigen Communications vs. Integrated Ventures | Altigen Communications vs. AudioCodes |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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