Correlation Between I Tech and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both I Tech and Invisio Communications 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 I Tech and Invisio Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Tech and Invisio Communications AB, you can compare the effects of market volatilities on I Tech and Invisio Communications 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 I Tech with a short position of Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and Invisio Communications.
Diversification Opportunities for I Tech and Invisio Communications
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITECH and Invisio is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications and I Tech 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 I Tech are associated (or correlated) with Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of I Tech i.e., I Tech and Invisio Communications go up and down completely randomly.
Pair Corralation between I Tech and Invisio Communications
Assuming the 90 days trading horizon I Tech is expected to generate 1.35 times more return on investment than Invisio Communications. However, I Tech is 1.35 times more volatile than Invisio Communications AB. It trades about 0.11 of its potential returns per unit of risk. Invisio Communications AB is currently generating about 0.13 per unit of risk. If you would invest 4,700 in I Tech on September 1, 2024 and sell it today you would earn a total of 260.00 from holding I Tech or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Tech vs. Invisio Communications AB
Performance |
| Timeline |
| I Tech |
| Invisio Communications |
I Tech and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Tech and Invisio Communications
The main advantage of trading using opposite I Tech and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Tech position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' long position.| I Tech vs. ExpreS2ion Biotech Holding | I Tech vs. Hansa Biopharma AB | I Tech vs. Saniona AB | I Tech vs. Oncopeptides AB |
| Invisio Communications vs. Samhllsbyggnadsbolaget i Norden | Invisio Communications vs. Sinch AB | Invisio Communications vs. Embracer Group AB | Invisio Communications vs. Evolution AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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