Correlation Between I Tech and MilDef Group
Can any of the company-specific risk be diversified away by investing in both I Tech and MilDef Group 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 MilDef Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Tech and MilDef Group AB, you can compare the effects of market volatilities on I Tech and MilDef Group 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 MilDef Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and MilDef Group.
Diversification Opportunities for I Tech and MilDef Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ITECH and MilDef is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and MilDef Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MilDef Group AB 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 MilDef Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MilDef Group AB has no effect on the direction of I Tech i.e., I Tech and MilDef Group go up and down completely randomly.
Pair Corralation between I Tech and MilDef Group
Assuming the 90 days trading horizon I Tech is expected to generate 1.06 times more return on investment than MilDef Group. However, I Tech is 1.06 times more volatile than MilDef Group AB. It trades about 0.3 of its potential returns per unit of risk. MilDef Group AB is currently generating about 0.31 per unit of risk. If you would invest 4,520 in I Tech on September 12, 2024 and sell it today you would earn a total of 880.00 from holding I Tech or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Tech vs. MilDef Group AB
Performance |
| Timeline |
| I Tech |
| MilDef Group AB |
I Tech and MilDef Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Tech and MilDef Group
The main advantage of trading using opposite I Tech and MilDef Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Tech position performs unexpectedly, MilDef Group 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 MilDef Group will offset losses from the drop in MilDef Group's long position.The idea behind I Tech and MilDef Group AB 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.| MilDef Group vs. I Tech | MilDef Group vs. Filo Mining Corp | MilDef Group vs. Lundin Mining | MilDef Group vs. Redsense Medical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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