Correlation Between Capex SA and International Business
Can any of the company-specific risk be diversified away by investing in both Capex SA and International Business 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 Capex SA and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and International Business Machines, you can compare the effects of market volatilities on Capex SA and International Business 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 Capex SA with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and International Business.
Diversification Opportunities for Capex SA and International Business
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capex and International is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Capex SA 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 Capex SA are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Capex SA i.e., Capex SA and International Business go up and down completely randomly.
Pair Corralation between Capex SA and International Business
Assuming the 90 days trading horizon Capex SA is expected to generate 1.02 times more return on investment than International Business. However, Capex SA is 1.02 times more volatile than International Business Machines. It trades about 0.13 of its potential returns per unit of risk. International Business Machines is currently generating about 0.07 per unit of risk. If you would invest 69,000 in Capex SA on November 29, 2024 and sell it today you would earn a total of 546,000 from holding Capex SA or generate 791.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Capex SA vs. International Business Machine
Performance |
Timeline |
Capex SA |
International Business |
Capex SA and International Business Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capex SA and International Business
The main advantage of trading using opposite Capex SA and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.Capex SA vs. Compania de Transporte | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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