Correlation Between Intouch Holdings and Global Power

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

By analyzing existing cross correlation between Intouch Holdings Public and Global Power Synergy, you can compare the effects of market volatilities on Intouch Holdings and Global Power 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 Intouch Holdings with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intouch Holdings and Global Power.

Diversification Opportunities for Intouch Holdings and Global Power

0.08

Correlation Coefficient

Intouch Holdings  Global Power

Significant diversification

The 3 months correlation between Intouch and Global is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy and Intouch Holdings 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 Intouch Holdings Public are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of Intouch Holdings i.e., Intouch Holdings and Global Power go up and down completely randomly.

Pair Corralation between Intouch Holdings and Global Power

Assuming the 90 days trading horizon Intouch Holdings is expected to generate 213.37 times less return on investment than Global Power. But when comparing it to its historical volatility, Intouch Holdings Public is 71.81 times less risky than Global Power. It trades about 0.05 of its potential returns per unit of risk. Global Power Synergy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,225  in Global Power Synergy on September 27, 2024 and sell it today you would lose (975.00) from holding Global Power Synergy or give up 18.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	63.33%
Values	Daily Returns

Intouch Holdings Public  vs.  Global Power Synergy

Intouch Holdings Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intouch Holdings Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Intouch Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Power Synergy

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Global Power Synergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Global Power sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intouch Holdings and Global Power

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

The idea behind Intouch Holdings Public and Global Power Synergy 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..