Correlation Between Team and Network 1
Can any of the company-specific risk be diversified away by investing in both Team and Network 1 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 Team and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Inc and Network 1 Technologies, you can compare the effects of market volatilities on Team and Network 1 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 Team with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team and Network 1.
Diversification Opportunities for Team and Network 1
Very good diversification
The 3 months correlation between Team and Network is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Team Inc and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and Team 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 Team Inc are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Team i.e., Team and Network 1 go up and down completely randomly.
Pair Corralation between Team and Network 1
Given the investment horizon of 90 days Team Inc is expected to generate 3.12 times more return on investment than Network 1. However, Team is 3.12 times more volatile than Network 1 Technologies. It trades about 0.25 of its potential returns per unit of risk. Network 1 Technologies is currently generating about -0.14 per unit of risk. If you would invest 1,369 in Team Inc on November 3, 2024 and sell it today you would earn a total of 311.00 from holding Team Inc or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Team Inc vs. Network 1 Technologies
Performance |
| Timeline |
| Team Inc |
| Network 1 Technologies |
Team and Network 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Team and Network 1
The main advantage of trading using opposite Team and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.The idea behind Team Inc and Network 1 Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Network 1 vs. Civeo Corp | Network 1 vs. BrightView Holdings | Network 1 vs. Maximus | Network 1 vs. CBIZ Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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