Correlation Between Hitek Global and Model N

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

By analyzing existing cross correlation between Hitek Global Ordinary and Model N, you can compare the effects of market volatilities on Hitek Global and Model N 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 Hitek Global with a short position of Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitek Global and Model N.

Diversification Opportunities for Hitek Global and Model N

-0.55

Correlation Coefficient

Hitek Global  Model N

Excellent diversification

The 3 months correlation between Hitek and Model is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hitek Global Ordinary and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and Hitek Global 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 Hitek Global Ordinary are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Hitek Global i.e., Hitek Global and Model N go up and down completely randomly.

Pair Corralation between Hitek Global and Model N

Given the investment horizon of 90 days Hitek Global Ordinary is expected to under-perform the Model N. In addition to that, Hitek Global is 88.13 times more volatile than Model N. It trades about -0.05 of its total potential returns per unit of risk. Model N is currently generating about 0.5 per unit of volatility. If you would invest  2,987  in Model N on September 2, 2024 and sell it today you would earn a total of  13.00  from holding Model N or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	13.49%
Values	Daily Returns

Hitek Global Ordinary  vs.  Model N

Hitek Global Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hitek Global Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Model N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Model N has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Model N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hitek Global and Model N

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

The idea behind Hitek Global Ordinary and Model N 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.