Correlation Between Direct Communication and TTEC Holdings

Can any of the company-specific risk be diversified away by investing in both Direct Communication and TTEC Holdings 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 Direct Communication and TTEC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Direct Communication Solutions and TTEC Holdings, you can compare the effects of market volatilities on Direct Communication and TTEC Holdings 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 Direct Communication with a short position of TTEC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Communication and TTEC Holdings.

Diversification Opportunities for Direct Communication and TTEC Holdings

-0.23

Correlation Coefficient

Direct Communication  TTEC Holdings

Very good diversification

The 3 months correlation between Direct and TTEC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Direct Communication Solutions and TTEC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTEC Holdings and Direct Communication 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 Direct Communication Solutions are associated (or correlated) with TTEC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTEC Holdings has no effect on the direction of Direct Communication i.e., Direct Communication and TTEC Holdings go up and down completely randomly.

Pair Corralation between Direct Communication and TTEC Holdings

Given the investment horizon of 90 days Direct Communication Solutions is expected to under-perform the TTEC Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Direct Communication Solutions is 1.51 times less risky than TTEC Holdings. The pink sheet trades about -0.03 of its potential returns per unit of risk. The TTEC Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  479.00  in TTEC Holdings on September 4, 2024 and sell it today you would earn a total of  44.00  from holding TTEC Holdings or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Direct Communication Solutions  vs.  TTEC Holdings

Direct Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Direct Communication Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TTEC Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TTEC Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, TTEC Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Direct Communication and TTEC Holdings

The main advantage of trading using opposite Direct Communication and TTEC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Communication position performs unexpectedly, TTEC Holdings 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 TTEC Holdings will offset losses from the drop in TTEC Holdings' long position.

The idea behind Direct Communication Solutions and TTEC Holdings 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.