Correlation Between Formula Systems and TTEC Holdings
Can any of the company-specific risk be diversified away by investing in both Formula Systems and TTEC Holdings 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 Formula Systems and TTEC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formula Systems 1985 and TTEC Holdings, you can compare the effects of market volatilities on Formula Systems and TTEC Holdings 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 Formula Systems with a short position of TTEC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Systems and TTEC Holdings.
Diversification Opportunities for Formula Systems and TTEC Holdings
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Formula and TTEC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Formula Systems 1985 and TTEC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTEC Holdings and Formula Systems 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 Formula Systems 1985 are associated (or correlated) with TTEC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTEC Holdings has no effect on the direction of Formula Systems i.e., Formula Systems and TTEC Holdings go up and down completely randomly.
Pair Corralation between Formula Systems and TTEC Holdings
Assuming the 90 days horizon Formula Systems 1985 is expected to under-perform the TTEC Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Formula Systems 1985 is 1.7 times less risky than TTEC Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The TTEC Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 543.00 in TTEC Holdings on August 27, 2024 and sell it today you would lose (6.00) from holding TTEC Holdings or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formula Systems 1985 vs. TTEC Holdings
Performance |
| Timeline |
| Formula Systems 1985 |
| TTEC Holdings |
Formula Systems and TTEC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formula Systems and TTEC Holdings
The main advantage of trading using opposite Formula Systems and TTEC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formula Systems position performs unexpectedly, TTEC Holdings 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 TTEC Holdings will offset losses from the drop in TTEC Holdings' long position.| Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Information Services Group | Formula Systems vs. The Hackett Group |
| TTEC Holdings vs. ExlService Holdings | TTEC Holdings vs. Genpact Limited | TTEC Holdings vs. ASGN Inc | TTEC Holdings vs. Science Applications International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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