Correlation Between TAT Technologies and Payment Financial
Can any of the company-specific risk be diversified away by investing in both TAT Technologies and Payment Financial 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 Payment Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAT Technologies and Payment Financial Technologies, you can compare the effects of market volatilities on TAT Technologies and Payment Financial 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 Payment Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAT Technologies and Payment Financial.
Diversification Opportunities for TAT Technologies and Payment Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TAT and Payment is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TAT Technologies and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial 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 Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of TAT Technologies i.e., TAT Technologies and Payment Financial go up and down completely randomly.
Pair Corralation between TAT Technologies and Payment Financial
Assuming the 90 days trading horizon TAT Technologies is expected to generate 0.72 times more return on investment than Payment Financial. However, TAT Technologies is 1.39 times less risky than Payment Financial. It trades about 0.17 of its potential returns per unit of risk. Payment Financial Technologies is currently generating about 0.04 per unit of risk. 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 |
TAT Technologies vs. Payment Financial Technologies
Performance |
| Timeline |
| TAT Technologies |
| Payment Financial |
TAT Technologies and Payment Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAT Technologies and Payment Financial
The main advantage of trading using opposite TAT Technologies and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAT Technologies position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial'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 |
| Payment Financial vs. Automatic Bank Services | Payment Financial vs. Utron | Payment Financial vs. Brainsway | Payment Financial vs. Mivne Real Estate |
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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