Correlation Between Itay Financial and Gamatronic Electronic
Can any of the company-specific risk be diversified away by investing in both Itay Financial and Gamatronic Electronic 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 Itay Financial and Gamatronic Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itay Financial AA and Gamatronic Electronic Industries, you can compare the effects of market volatilities on Itay Financial and Gamatronic Electronic 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 Itay Financial with a short position of Gamatronic Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Gamatronic Electronic.
Diversification Opportunities for Itay Financial and Gamatronic Electronic
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itay and Gamatronic is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Gamatronic Electronic Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamatronic Electronic and Itay Financial 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 Itay Financial AA are associated (or correlated) with Gamatronic Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamatronic Electronic has no effect on the direction of Itay Financial i.e., Itay Financial and Gamatronic Electronic go up and down completely randomly.
Pair Corralation between Itay Financial and Gamatronic Electronic
Assuming the 90 days trading horizon Itay Financial AA is expected to generate 1.85 times more return on investment than Gamatronic Electronic. However, Itay Financial is 1.85 times more volatile than Gamatronic Electronic Industries. It trades about 0.08 of its potential returns per unit of risk. Gamatronic Electronic Industries is currently generating about -0.05 per unit of risk. If you would invest 25,000 in Itay Financial AA on September 1, 2024 and sell it today you would earn a total of 7,420 from holding Itay Financial AA or generate 29.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itay Financial AA vs. Gamatronic Electronic Industri
Performance |
| Timeline |
| Itay Financial AA |
| Gamatronic Electronic |
Itay Financial and Gamatronic Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itay Financial and Gamatronic Electronic
The main advantage of trading using opposite Itay Financial and Gamatronic Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial position performs unexpectedly, Gamatronic Electronic 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 Gamatronic Electronic will offset losses from the drop in Gamatronic Electronic's long position.| Itay Financial vs. Harel Insurance Investments | Itay Financial vs. Teuza A Fairchild | Itay Financial vs. Blender Financial Technologies | Itay Financial vs. Gamatronic Electronic Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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