Correlation Between Taylor Wimpey and Itaconix Plc

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

By analyzing existing cross correlation between Taylor Wimpey PLC and Itaconix plc, you can compare the effects of market volatilities on Taylor Wimpey and Itaconix Plc 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 Taylor Wimpey with a short position of Itaconix Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Wimpey and Itaconix Plc.

Diversification Opportunities for Taylor Wimpey and Itaconix Plc

-0.64

Correlation Coefficient

Taylor Wimpey  Itaconix Plc

Excellent diversification

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

Pair Corralation between Taylor Wimpey and Itaconix Plc

Assuming the 90 days trading horizon Taylor Wimpey PLC is expected to under-perform the Itaconix Plc. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Wimpey PLC is 2.01 times less risky than Itaconix Plc. The stock trades about -0.03 of its potential returns per unit of risk. The Itaconix plc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  9,750  in Itaconix plc on April 24, 2025 and sell it today you would earn a total of  3,000  from holding Itaconix plc or generate 30.77% return on investment over 90 days.

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

Taylor Wimpey PLC  vs.  Itaconix plc

Taylor Wimpey PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Wimpey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Taylor Wimpey is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Itaconix plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Itaconix plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Itaconix Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taylor Wimpey and Itaconix Plc

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

The idea behind Taylor Wimpey PLC and Itaconix plc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..