Correlation Between Payment Financial and TAT Technologies
Can any of the company-specific risk be diversified away by investing in both Payment Financial and TAT Technologies 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 Payment Financial and TAT Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payment Financial Technologies and TAT Technologies, you can compare the effects of market volatilities on Payment Financial and TAT Technologies 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 Payment Financial with a short position of TAT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and TAT Technologies.
Diversification Opportunities for Payment Financial and TAT Technologies
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payment and TAT is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and TAT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAT Technologies and Payment 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 Payment Financial Technologies are associated (or correlated) with TAT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAT Technologies has no effect on the direction of Payment Financial i.e., Payment Financial and TAT Technologies go up and down completely randomly.
Pair Corralation between Payment Financial and TAT Technologies
Assuming the 90 days trading horizon Payment Financial is expected to generate 3.25 times less return on investment than TAT Technologies. In addition to that, Payment Financial is 1.39 times more volatile than TAT Technologies. It trades about 0.04 of its total potential returns per unit of risk. TAT Technologies is currently generating about 0.17 per unit of volatility. If you would invest 202,700 in TAT Technologies on September 3, 2024 and sell it today you would earn a total of 621,300 from holding TAT Technologies or generate 306.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payment Financial Technologies vs. TAT Technologies
Performance |
| Timeline |
| Payment Financial |
| TAT Technologies |
Payment Financial and TAT Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payment Financial and TAT Technologies
The main advantage of trading using opposite Payment Financial and TAT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial position performs unexpectedly, TAT Technologies 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 TAT Technologies will offset losses from the drop in TAT Technologies' long position.| Payment Financial vs. Automatic Bank Services | Payment Financial vs. Utron | Payment Financial vs. Brainsway | Payment Financial vs. Mivne Real Estate |
| TAT Technologies vs. Bet Shemesh Engines | TAT Technologies vs. Orbit Technologies | TAT Technologies vs. Tower Semiconductor | TAT Technologies vs. Elron 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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