Correlation Between Dun Bradstreet and Intercontinental
Can any of the company-specific risk be diversified away by investing in both Dun Bradstreet and Intercontinental 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 Dun Bradstreet and Intercontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dun Bradstreet Holdings and Intercontinental Exchange, you can compare the effects of market volatilities on Dun Bradstreet and Intercontinental 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 Dun Bradstreet with a short position of Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dun Bradstreet and Intercontinental.
Diversification Opportunities for Dun Bradstreet and Intercontinental
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dun and Intercontinental is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dun Bradstreet Holdings and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange and Dun Bradstreet 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 Dun Bradstreet Holdings are associated (or correlated) with Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of Dun Bradstreet i.e., Dun Bradstreet and Intercontinental go up and down completely randomly.
Pair Corralation between Dun Bradstreet and Intercontinental
Considering the 90-day investment horizon Dun Bradstreet Holdings is expected to under-perform the Intercontinental. In addition to that, Dun Bradstreet is 2.63 times more volatile than Intercontinental Exchange. It trades about -0.39 of its total potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.34 per unit of volatility. If you would invest 15,884 in Intercontinental Exchange on November 29, 2024 and sell it today you would earn a total of 1,409 from holding Intercontinental Exchange or generate 8.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dun Bradstreet Holdings vs. Intercontinental Exchange
Performance |
Timeline |
Dun Bradstreet Holdings |
Intercontinental Exchange |
Dun Bradstreet and Intercontinental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dun Bradstreet and Intercontinental
The main advantage of trading using opposite Dun Bradstreet and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dun Bradstreet position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental's long position.Dun Bradstreet vs. FactSet Research Systems | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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