Correlation Between TAT Technologies and Brand
Can any of the company-specific risk be diversified away by investing in both TAT Technologies and Brand 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 TAT Technologies and Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAT Technologies and Brand Group, you can compare the effects of market volatilities on TAT Technologies and Brand 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 TAT Technologies with a short position of Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAT Technologies and Brand.
Diversification Opportunities for TAT Technologies and Brand
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TAT and Brand is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding TAT Technologies and Brand Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand Group and TAT Technologies 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 TAT Technologies are associated (or correlated) with Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand Group has no effect on the direction of TAT Technologies i.e., TAT Technologies and Brand go up and down completely randomly.
Pair Corralation between TAT Technologies and Brand
Assuming the 90 days trading horizon TAT Technologies is expected to generate 1.93 times more return on investment than Brand. However, TAT Technologies is 1.93 times more volatile than Brand Group. It trades about 0.3 of its potential returns per unit of risk. Brand Group is currently generating about 0.12 per unit of risk. If you would invest 682,700 in TAT Technologies on September 3, 2024 and sell it today you would earn a total of 141,300 from holding TAT Technologies or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAT Technologies vs. Brand Group
Performance |
| Timeline |
| TAT Technologies |
| Brand Group |
TAT Technologies and Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAT Technologies and Brand
The main advantage of trading using opposite TAT Technologies and Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAT Technologies position performs unexpectedly, Brand 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 Brand will offset losses from the drop in Brand's long position.| TAT Technologies vs. Bet Shemesh Engines | TAT Technologies vs. Orbit Technologies | TAT Technologies vs. Tower Semiconductor | TAT Technologies vs. Elron Electronic Industries |
| Brand vs. Golan Plastic | Brand vs. B Communications | Brand vs. Gilat Telecom Global | Brand vs. ICL Israel Chemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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