Correlation Between Tat Techno and National Storm
Can any of the company-specific risk be diversified away by investing in both Tat Techno and National Storm 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 Techno and National Storm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tat Techno and National Storm Recovery, you can compare the effects of market volatilities on Tat Techno and National Storm 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 Techno with a short position of National Storm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and National Storm.
Diversification Opportunities for Tat Techno and National Storm
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tat and National is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and National Storm Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storm Recovery and Tat Techno 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 Techno are associated (or correlated) with National Storm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storm Recovery has no effect on the direction of Tat Techno i.e., Tat Techno and National Storm go up and down completely randomly.
Pair Corralation between Tat Techno and National Storm
Given the investment horizon of 90 days Tat Techno is expected to generate 0.51 times more return on investment than National Storm. However, Tat Techno is 1.96 times less risky than National Storm. It trades about 0.19 of its potential returns per unit of risk. National Storm Recovery is currently generating about -0.33 per unit of risk. If you would invest 1,857 in Tat Techno on August 29, 2024 and sell it today you would earn a total of 344.00 from holding Tat Techno or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tat Techno vs. National Storm Recovery
Performance |
| Timeline |
| Tat Techno |
| National Storm Recovery |
Tat Techno and National Storm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tat Techno and National Storm
The main advantage of trading using opposite Tat Techno and National Storm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, National Storm 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 National Storm will offset losses from the drop in National Storm's long position.| Tat Techno vs. Innovative Solutions and | Tat Techno vs. CPI Aerostructures | Tat Techno vs. Air Industries Group | Tat Techno vs. Ballistic Recovery Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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