Correlation Between Energy Focu and International Paper
Can any of the company-specific risk be diversified away by investing in both Energy Focu and International Paper 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 Energy Focu and International Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Focu and International Paper, you can compare the effects of market volatilities on Energy Focu and International Paper 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 Energy Focu with a short position of International Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Focu and International Paper.
Diversification Opportunities for Energy Focu and International Paper
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and International is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Energy Focu and International Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Paper and Energy Focu 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 Energy Focu are associated (or correlated) with International Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Paper has no effect on the direction of Energy Focu i.e., Energy Focu and International Paper go up and down completely randomly.
Pair Corralation between Energy Focu and International Paper
Given the investment horizon of 90 days Energy Focu is expected to generate 4.16 times less return on investment than International Paper. In addition to that, Energy Focu is 1.96 times more volatile than International Paper. It trades about 0.04 of its total potential returns per unit of risk. International Paper is currently generating about 0.32 per unit of volatility. If you would invest 4,818 in International Paper on August 26, 2024 and sell it today you would earn a total of 1,114 from holding International Paper or generate 23.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Focu vs. International Paper
Performance |
| Timeline |
| Energy Focu |
| International Paper |
Energy Focu and International Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Focu and International Paper
The main advantage of trading using opposite Energy Focu and International Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Focu position performs unexpectedly, International Paper 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 Paper will offset losses from the drop in International Paper's long position.| Energy Focu vs. Petros Pharmaceuticals | Energy Focu vs. Pioneer Power Solutions | Energy Focu vs. Ensysce Biosciences |
| International Paper vs. Sealed Air | International Paper vs. Avery Dennison Corp | International Paper vs. Sonoco Products | International Paper vs. Ball Corporation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |