Correlation Between Integral and ConvaTec Group
Can any of the company-specific risk be diversified away by investing in both Integral and ConvaTec Group 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 ConvaTec Group 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 ConvaTec Group Plc, you can compare the effects of market volatilities on Integral and ConvaTec Group 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 ConvaTec Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and ConvaTec Group.
Diversification Opportunities for Integral and ConvaTec Group
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Integral and ConvaTec is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and ConvaTec Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConvaTec Group Plc 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 ConvaTec Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConvaTec Group Plc has no effect on the direction of Integral i.e., Integral and ConvaTec Group go up and down completely randomly.
Pair Corralation between Integral and ConvaTec Group
Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the ConvaTec Group. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 1.66 times less risky than ConvaTec Group. The stock trades about -0.05 of its potential returns per unit of risk. The ConvaTec Group Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 271.00 in ConvaTec Group Plc on September 1, 2024 and sell it today you would earn a total of 24.00 from holding ConvaTec Group Plc or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Integral Ad Science vs. ConvaTec Group Plc
Performance |
| Timeline |
| Integral Ad Science |
| ConvaTec Group Plc |
Integral and ConvaTec Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and ConvaTec Group
The main advantage of trading using opposite Integral and ConvaTec Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral position performs unexpectedly, ConvaTec Group 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 ConvaTec Group will offset losses from the drop in ConvaTec Group's long position.The idea behind Integral Ad Science and ConvaTec Group Plc 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.| ConvaTec Group vs. Usio Inc | ConvaTec Group vs. Analog Devices | ConvaTec Group vs. Q2 Holdings | ConvaTec Group vs. Evertz Technologies Limited |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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