Correlation Between Arena Group and IAC
Can any of the company-specific risk be diversified away by investing in both Arena Group 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 Arena Group and IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and IAC Inc, you can compare the effects of market volatilities on Arena Group 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 Arena Group with a short position of IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and IAC.
Diversification Opportunities for Arena Group and IAC
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arena and IAC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc and Arena Group 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 Arena Group Holdings 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 Arena Group i.e., Arena Group and IAC go up and down completely randomly.
Pair Corralation between Arena Group and IAC
Given the investment horizon of 90 days Arena Group Holdings is expected to under-perform the IAC. In addition to that, Arena Group is 5.0 times more volatile than IAC Inc. It trades about 0.0 of its total potential returns per unit of risk. IAC Inc is currently generating about 0.01 per unit of volatility. If you would invest 4,748 in IAC Inc on August 28, 2024 and sell it today you would earn a total of 108.00 from holding IAC Inc or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Group Holdings vs. IAC Inc
Performance |
| Timeline |
| Arena Group Holdings |
| IAC Inc |
Arena Group and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and IAC
The main advantage of trading using opposite Arena Group and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group 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.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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