Correlation Between Real Heart and I Tech

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

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

Diversification Opportunities for Real Heart and I Tech

-0.64

Correlation Coefficient

Real Heart  I Tech

Excellent diversification

The 3 months correlation between Real and ITECH is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Real Heart and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech and Real Heart 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 Real Heart are associated (or correlated) with I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Real Heart i.e., Real Heart and I Tech go up and down completely randomly.

Pair Corralation between Real Heart and I Tech

Assuming the 90 days trading horizon Real Heart is expected to under-perform the I Tech. In addition to that, Real Heart is 1.34 times more volatile than I Tech. It trades about -0.05 of its total potential returns per unit of risk. I Tech is currently generating about 0.26 per unit of volatility. If you would invest  7,741  in I Tech on April 29, 2025 and sell it today you would earn a total of  3,559  from holding I Tech or generate 45.98% return on investment over 90 days.

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

Real Heart  vs.  I Tech

Real Heart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Heart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

I Tech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, I Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Real Heart and I Tech

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

The idea behind Real Heart and I Tech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.