Correlation Between IBF Financial and Sirtec International
Can any of the company-specific risk be diversified away by investing in both IBF Financial and Sirtec International 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 IBF Financial and Sirtec International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBF Financial Holdings and Sirtec International Co, you can compare the effects of market volatilities on IBF Financial and Sirtec International 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 IBF Financial with a short position of Sirtec International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBF Financial and Sirtec International.
Diversification Opportunities for IBF Financial and Sirtec International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBF and Sirtec is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding IBF Financial Holdings and Sirtec International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirtec International and IBF Financial 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 IBF Financial Holdings are associated (or correlated) with Sirtec International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirtec International has no effect on the direction of IBF Financial i.e., IBF Financial and Sirtec International go up and down completely randomly.
Pair Corralation between IBF Financial and Sirtec International
Assuming the 90 days trading horizon IBF Financial Holdings is expected to generate 0.95 times more return on investment than Sirtec International. However, IBF Financial Holdings is 1.05 times less risky than Sirtec International. It trades about 0.08 of its potential returns per unit of risk. Sirtec International Co is currently generating about 0.05 per unit of risk. If you would invest 1,160 in IBF Financial Holdings on September 14, 2024 and sell it today you would earn a total of 340.00 from holding IBF Financial Holdings or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBF Financial Holdings vs. Sirtec International Co
Performance |
| Timeline |
| IBF Financial Holdings |
| Sirtec International |
IBF Financial and Sirtec International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBF Financial and Sirtec International
The main advantage of trading using opposite IBF Financial and Sirtec International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBF Financial position performs unexpectedly, Sirtec International 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 Sirtec International will offset losses from the drop in Sirtec International's long position.| IBF Financial vs. Central Reinsurance Corp | IBF Financial vs. Huaku Development Co | IBF Financial vs. Fubon Financial Holding | IBF Financial vs. Chailease Holding Co |
| Sirtec International vs. Arbor Technology | Sirtec International vs. RiTdisplay Corp | Sirtec International vs. IBF Financial Holdings | Sirtec International vs. Materials Analysis Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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