Correlation Between One 97 and Investment Trust

Can any of the company-specific risk be diversified away by investing in both One 97 and Investment Trust 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 One 97 and Investment Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between One 97 Communications and The Investment Trust, you can compare the effects of market volatilities on One 97 and Investment Trust 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 One 97 with a short position of Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of One 97 and Investment Trust.

Diversification Opportunities for One 97 and Investment Trust

0.68

Correlation Coefficient

One 97  Investment Trust

Poor diversification

The 3 months correlation between One and Investment is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding One 97 Communications and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust and One 97 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 One 97 Communications are associated (or correlated) with Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of One 97 i.e., One 97 and Investment Trust go up and down completely randomly.

Pair Corralation between One 97 and Investment Trust

Assuming the 90 days trading horizon One 97 is expected to generate 1.74 times less return on investment than Investment Trust. But when comparing it to its historical volatility, One 97 Communications is 1.54 times less risky than Investment Trust. It trades about 0.12 of its potential returns per unit of risk. The Investment Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  11,324  in The Investment Trust on April 5, 2025 and sell it today you would earn a total of  3,432  from holding The Investment Trust or generate 30.31% return on investment over 90 days.

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

One 97 Communications  vs.  The Investment Trust

One 97 Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

Investment Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Investment Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Investment Trust exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with One 97 and Investment Trust

The main advantage of trading using opposite One 97 and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 97 position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust's long position.

The idea behind One 97 Communications and The Investment Trust 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.