Correlation Between Flare and ITC
Can any of the company-specific risk be diversified away by investing in both Flare and ITC 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 Flare and ITC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flare and ITC, you can compare the effects of market volatilities on Flare and ITC 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 Flare with a short position of ITC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flare and ITC.
Diversification Opportunities for Flare and ITC
Pay attention - limited upside
The 3 months correlation between Flare and ITC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flare and ITC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITC and Flare 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 Flare are associated (or correlated) with ITC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITC has no effect on the direction of Flare i.e., Flare and ITC go up and down completely randomly.
Pair Corralation between Flare and ITC
If you would invest 2.34 in Flare on November 10, 2024 and sell it today you would lose (0.09) from holding Flare or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Flare vs. ITC
Performance |
| Timeline |
| Flare |
| ITC |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Flare and ITC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flare and ITC
The main advantage of trading using opposite Flare and ITC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flare position performs unexpectedly, ITC 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 ITC will offset losses from the drop in ITC's long position.The idea behind Flare and ITC 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.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |