Correlation Between Geodrill and IFabric Corp
Can any of the company-specific risk be diversified away by investing in both Geodrill and IFabric Corp 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 Geodrill and IFabric Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geodrill Limited and iFabric Corp, you can compare the effects of market volatilities on Geodrill and IFabric Corp 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 Geodrill with a short position of IFabric Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geodrill and IFabric Corp.
Diversification Opportunities for Geodrill and IFabric Corp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Geodrill and IFabric is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Geodrill Limited and iFabric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iFabric Corp and Geodrill 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 Geodrill Limited are associated (or correlated) with IFabric Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iFabric Corp has no effect on the direction of Geodrill i.e., Geodrill and IFabric Corp go up and down completely randomly.
Pair Corralation between Geodrill and IFabric Corp
Assuming the 90 days trading horizon Geodrill Limited is expected to generate 0.65 times more return on investment than IFabric Corp. However, Geodrill Limited is 1.54 times less risky than IFabric Corp. It trades about 0.16 of its potential returns per unit of risk. iFabric Corp is currently generating about -0.01 per unit of risk. If you would invest 267.00 in Geodrill Limited on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Geodrill Limited or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geodrill Limited vs. iFabric Corp
Performance |
| Timeline |
| Geodrill Limited |
| iFabric Corp |
Geodrill and IFabric Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geodrill and IFabric Corp
The main advantage of trading using opposite Geodrill and IFabric Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geodrill position performs unexpectedly, IFabric Corp 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 IFabric Corp will offset losses from the drop in IFabric Corp's long position.| Geodrill vs. Stria Lithium | Geodrill vs. Dynacor Gold Mines | Geodrill vs. Foraco International SA | Geodrill vs. Hammond Power Solutions |
| IFabric Corp vs. Caldwell Partners International | IFabric Corp vs. Bri Chem Corp | IFabric Corp vs. Geodrill Limited | IFabric Corp vs. Supremex |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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