Correlation Between Horizon Securities and IBF Financial
Can any of the company-specific risk be diversified away by investing in both Horizon Securities and IBF Financial 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 Horizon Securities and IBF Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Securities Co and IBF Financial Holdings, you can compare the effects of market volatilities on Horizon Securities and IBF Financial 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 Horizon Securities with a short position of IBF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Securities and IBF Financial.
Diversification Opportunities for Horizon Securities and IBF Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Horizon and IBF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Securities Co and IBF Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBF Financial Holdings and Horizon Securities 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 Horizon Securities Co are associated (or correlated) with IBF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBF Financial Holdings has no effect on the direction of Horizon Securities i.e., Horizon Securities and IBF Financial go up and down completely randomly.
Pair Corralation between Horizon Securities and IBF Financial
Assuming the 90 days trading horizon Horizon Securities Co is expected to generate 1.2 times more return on investment than IBF Financial. However, Horizon Securities is 1.2 times more volatile than IBF Financial Holdings. It trades about 0.04 of its potential returns per unit of risk. IBF Financial Holdings is currently generating about -0.28 per unit of risk. If you would invest 1,060 in Horizon Securities Co on October 20, 2024 and sell it today you would earn a total of 10.00 from holding Horizon Securities Co or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Securities Co vs. IBF Financial Holdings
Performance |
| Timeline |
| Horizon Securities |
| IBF Financial Holdings |
Horizon Securities and IBF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Securities and IBF Financial
The main advantage of trading using opposite Horizon Securities and IBF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Securities position performs unexpectedly, IBF Financial 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 IBF Financial will offset losses from the drop in IBF Financial's long position.| Horizon Securities vs. Hung Sheng Construction | Horizon Securities vs. Mercuries Life Insurance | Horizon Securities vs. YungShin Global Holding | Horizon Securities vs. First Hotel Co |
| IBF Financial vs. Galaxy Software Services | IBF Financial vs. Emerging Display Technologies | IBF Financial vs. Power Wind Health | IBF Financial vs. Tehmag Foods |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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