Correlation Between Intevac and Twin Disc

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

By analyzing existing cross correlation between Intevac and Twin Disc Incorporated, you can compare the effects of market volatilities on Intevac and Twin Disc 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 Intevac with a short position of Twin Disc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intevac and Twin Disc.

Diversification Opportunities for Intevac and Twin Disc

0.07

Correlation Coefficient

Intevac  Twin Disc

Significant diversification

The 3 months correlation between Intevac and Twin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Twin Disc Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Disc and Intevac 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 Intevac are associated (or correlated) with Twin Disc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Disc has no effect on the direction of Intevac i.e., Intevac and Twin Disc go up and down completely randomly.

Pair Corralation between Intevac and Twin Disc

Given the investment horizon of 90 days Intevac is expected to under-perform the Twin Disc. In addition to that, Intevac is 1.0 times more volatile than Twin Disc Incorporated. It trades about -0.01 of its total potential returns per unit of risk. Twin Disc Incorporated is currently generating about 0.02 per unit of volatility. If you would invest  1,114  in Twin Disc Incorporated on September 12, 2024 and sell it today you would earn a total of  125.00  from holding Twin Disc Incorporated or generate 11.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intevac  vs.  Twin Disc Incorporated

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Twin Disc

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Twin Disc Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Twin Disc is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Intevac and Twin Disc

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

The idea behind Intevac and Twin Disc Incorporated 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.