Correlation Between Intertech and Daios Plastics
Can any of the company-specific risk be diversified away by investing in both Intertech and Daios Plastics 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 Intertech and Daios Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertech SA Inter and Daios Plastics SA, you can compare the effects of market volatilities on Intertech and Daios Plastics 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 Intertech with a short position of Daios Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertech and Daios Plastics.
Diversification Opportunities for Intertech and Daios Plastics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intertech and Daios is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter and Daios Plastics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daios Plastics SA and Intertech 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 Intertech SA Inter are associated (or correlated) with Daios Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daios Plastics SA has no effect on the direction of Intertech i.e., Intertech and Daios Plastics go up and down completely randomly.
Pair Corralation between Intertech and Daios Plastics
Assuming the 90 days trading horizon Intertech is expected to generate 1.3 times less return on investment than Daios Plastics. In addition to that, Intertech is 1.03 times more volatile than Daios Plastics SA. It trades about 0.01 of its total potential returns per unit of risk. Daios Plastics SA is currently generating about 0.02 per unit of volatility. If you would invest 314.00 in Daios Plastics SA on November 5, 2024 and sell it today you would earn a total of 26.00 from holding Daios Plastics SA or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertech SA Inter vs. Daios Plastics SA
Performance |
| Timeline |
| Intertech SA Inter |
| Daios Plastics SA |
Intertech and Daios Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertech and Daios Plastics
The main advantage of trading using opposite Intertech and Daios Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertech position performs unexpectedly, Daios Plastics 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 Daios Plastics will offset losses from the drop in Daios Plastics' long position.The idea behind Intertech SA Inter and Daios Plastics SA 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.| Daios Plastics vs. Ktima Kostas Lazaridis | Daios Plastics vs. Centric Holdings SA | Daios Plastics vs. Trastor Real Estate | Daios Plastics vs. As Commercial Industrial |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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