Correlation Between ANGI Homeservices and IAC
Can any of the company-specific risk be diversified away by investing in both ANGI Homeservices and IAC 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 ANGI Homeservices and IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGI Homeservices and IAC Inc, you can compare the effects of market volatilities on ANGI Homeservices and IAC 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 ANGI Homeservices with a short position of IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGI Homeservices and IAC.
Diversification Opportunities for ANGI Homeservices and IAC
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ANGI and IAC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc and ANGI Homeservices 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 ANGI Homeservices are associated (or correlated) with IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of ANGI Homeservices i.e., ANGI Homeservices and IAC go up and down completely randomly.
Pair Corralation between ANGI Homeservices and IAC
Given the investment horizon of 90 days ANGI Homeservices is expected to under-perform the IAC. In addition to that, ANGI Homeservices is 1.94 times more volatile than IAC Inc. It trades about -0.11 of its total potential returns per unit of risk. IAC Inc is currently generating about -0.08 per unit of volatility. If you would invest 5,146 in IAC Inc on August 28, 2024 and sell it today you would lose (370.00) from holding IAC Inc or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGI Homeservices vs. IAC Inc
Performance |
| Timeline |
| ANGI Homeservices |
| IAC Inc |
ANGI Homeservices and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGI Homeservices and IAC
The main advantage of trading using opposite ANGI Homeservices and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGI Homeservices position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC's long position.| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc Class |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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