Correlation Between Integral and Abacus Life
Can any of the company-specific risk be diversified away by investing in both Integral and Abacus Life 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 Integral and Abacus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Abacus Life, you can compare the effects of market volatilities on Integral and Abacus Life 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 Integral with a short position of Abacus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Abacus Life.
Diversification Opportunities for Integral and Abacus Life
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Integral and Abacus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Abacus Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Life and Integral 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 Integral Ad Science are associated (or correlated) with Abacus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Life has no effect on the direction of Integral i.e., Integral and Abacus Life go up and down completely randomly.
Pair Corralation between Integral and Abacus Life
Considering the 90-day investment horizon Integral is expected to generate 36.99 times less return on investment than Abacus Life. But when comparing it to its historical volatility, Integral Ad Science is 8.34 times less risky than Abacus Life. It trades about 0.05 of its potential returns per unit of risk. Abacus Life is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Abacus Life on November 27, 2024 and sell it today you would earn a total of 39.00 from holding Abacus Life or generate 36.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Integral Ad Science vs. Abacus Life
Performance |
| Timeline |
| Integral Ad Science |
| Abacus Life |
Integral and Abacus Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Abacus Life
The main advantage of trading using opposite Integral and Abacus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral position performs unexpectedly, Abacus Life 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 Abacus Life will offset losses from the drop in Abacus Life's long position.The idea behind Integral Ad Science and Abacus Life pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abacus Life vs. NETGEAR | Abacus Life vs. Coupang LLC | Abacus Life vs. Dave Busters Entertainment | Abacus Life vs. Scholastic |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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