Correlation Between International Consolidated and Schroder Asia
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Schroder Asia 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 International Consolidated and Schroder Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Schroder Asia Pacific, you can compare the effects of market volatilities on International Consolidated and Schroder Asia 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 International Consolidated with a short position of Schroder Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Schroder Asia.
Diversification Opportunities for International Consolidated and Schroder Asia
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Schroder is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Schroder Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder Asia Pacific and International Consolidated 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 International Consolidated Airlines are associated (or correlated) with Schroder Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder Asia Pacific has no effect on the direction of International Consolidated i.e., International Consolidated and Schroder Asia go up and down completely randomly.
Pair Corralation between International Consolidated and Schroder Asia
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 2.46 times more return on investment than Schroder Asia. However, International Consolidated is 2.46 times more volatile than Schroder Asia Pacific. It trades about 0.5 of its potential returns per unit of risk. Schroder Asia Pacific is currently generating about -0.03 per unit of risk. If you would invest 21,370 in International Consolidated Airlines on September 3, 2024 and sell it today you would earn a total of 4,710 from holding International Consolidated Airlines or generate 22.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Schroder Asia Pacific
Performance |
| Timeline |
| International Consolidated |
| Schroder Asia Pacific |
International Consolidated and Schroder Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Schroder Asia
The main advantage of trading using opposite International Consolidated and Schroder Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Schroder Asia 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 Schroder Asia will offset losses from the drop in Schroder Asia's long position.| International Consolidated vs. Catalyst Media Group | International Consolidated vs. CATLIN GROUP | International Consolidated vs. Magnora ASA | International Consolidated vs. RTW Venture Fund |
| Schroder Asia vs. Sabien Technology Group | Schroder Asia vs. Coor Service Management | Schroder Asia vs. International Biotechnology Trust | Schroder Asia vs. Vitec Software Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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