Correlation Between I Tech and Addtech AB

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

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

Diversification Opportunities for I Tech and Addtech AB

0.03

Correlation Coefficient

I Tech  Addtech AB

Significant diversification

The 3 months correlation between ITECH and Addtech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB and I Tech 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 I Tech are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of I Tech i.e., I Tech and Addtech AB go up and down completely randomly.

Pair Corralation between I Tech and Addtech AB

Assuming the 90 days trading horizon I Tech is expected to generate 1.04 times more return on investment than Addtech AB. However, I Tech is 1.04 times more volatile than Addtech AB. It trades about 0.18 of its potential returns per unit of risk. Addtech AB is currently generating about -0.05 per unit of risk. If you would invest  9,785  in I Tech on May 15, 2025 and sell it today you would earn a total of  2,115  from holding I Tech or generate 21.61% return on investment over 90 days.

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

I Tech  vs.  Addtech AB

I Tech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 14 (%) 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.

Addtech AB

Risk-Adjusted Performance

Weakest

Over the last 90 days Addtech AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Addtech AB is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with I Tech and Addtech AB

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

The idea behind I Tech and Addtech AB 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.