Correlation Between Cadre Holdings and Tat Techno
Can any of the company-specific risk be diversified away by investing in both Cadre Holdings and Tat Techno 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 Cadre Holdings and Tat Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadre Holdings and Tat Techno, you can compare the effects of market volatilities on Cadre Holdings and Tat Techno 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 Cadre Holdings with a short position of Tat Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadre Holdings and Tat Techno.
Diversification Opportunities for Cadre Holdings and Tat Techno
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cadre and Tat is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cadre Holdings and Tat Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tat Techno and Cadre Holdings 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 Cadre Holdings are associated (or correlated) with Tat Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tat Techno has no effect on the direction of Cadre Holdings i.e., Cadre Holdings and Tat Techno go up and down completely randomly.
Pair Corralation between Cadre Holdings and Tat Techno
Given the investment horizon of 90 days Cadre Holdings is expected to generate 2.96 times less return on investment than Tat Techno. But when comparing it to its historical volatility, Cadre Holdings is 1.41 times less risky than Tat Techno. It trades about 0.06 of its potential returns per unit of risk. Tat Techno is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 618.00 in Tat Techno on November 27, 2024 and sell it today you would earn a total of 2,083 from holding Tat Techno or generate 337.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadre Holdings vs. Tat Techno
Performance |
| Timeline |
| Cadre Holdings |
| Tat Techno |
Cadre Holdings and Tat Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadre Holdings and Tat Techno
The main advantage of trading using opposite Cadre Holdings and Tat Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadre Holdings position performs unexpectedly, Tat Techno 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 Tat Techno will offset losses from the drop in Tat Techno's long position.| Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
| Tat Techno vs. Innovative Solutions and | Tat Techno vs. CPI Aerostructures | Tat Techno vs. Air Industries Group | Tat Techno vs. Ballistic Recovery 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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