Correlation Between TAT Technologies and IBI Inv
Can any of the company-specific risk be diversified away by investing in both TAT Technologies and IBI Inv 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 IBI Inv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAT Technologies and IBI Inv House, you can compare the effects of market volatilities on TAT Technologies and IBI Inv 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 IBI Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAT Technologies and IBI Inv.
Diversification Opportunities for TAT Technologies and IBI Inv
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TAT and IBI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding TAT Technologies and IBI Inv House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBI Inv House 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 IBI Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBI Inv House has no effect on the direction of TAT Technologies i.e., TAT Technologies and IBI Inv go up and down completely randomly.
Pair Corralation between TAT Technologies and IBI Inv
Assuming the 90 days trading horizon TAT Technologies is expected to generate 1.62 times more return on investment than IBI Inv. However, TAT Technologies is 1.62 times more volatile than IBI Inv House. It trades about 0.25 of its potential returns per unit of risk. IBI Inv House is currently generating about 0.32 per unit of risk. If you would invest 703,200 in TAT Technologies on October 30, 2024 and sell it today you would earn a total of 338,800 from holding TAT Technologies or generate 48.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAT Technologies vs. IBI Inv House
Performance |
| Timeline |
| TAT Technologies |
| IBI Inv House |
TAT Technologies and IBI Inv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAT Technologies and IBI Inv
The main advantage of trading using opposite TAT Technologies and IBI Inv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAT Technologies position performs unexpectedly, IBI Inv 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 IBI Inv will offset losses from the drop in IBI Inv'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 |
| IBI Inv vs. WhiteSmoke Software | IBI Inv vs. Blender Financial Technologies | IBI Inv vs. Batm Advanced Communications | IBI Inv vs. Orbit Technologies |
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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