Correlation Between IB Acquisition and Dow Jones
Can any of the company-specific risk be diversified away by investing in both IB Acquisition and Dow Jones 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 IB Acquisition and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IB Acquisition Corp and Dow Jones Industrial, you can compare the effects of market volatilities on IB Acquisition and Dow Jones 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 IB Acquisition with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of IB Acquisition and Dow Jones.
Diversification Opportunities for IB Acquisition and Dow Jones
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between IBACR and Dow is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding IB Acquisition Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and IB Acquisition 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 IB Acquisition Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of IB Acquisition i.e., IB Acquisition and Dow Jones go up and down completely randomly.
Pair Corralation between IB Acquisition and Dow Jones
Assuming the 90 days horizon IB Acquisition Corp is expected to generate 27.38 times more return on investment than Dow Jones. However, IB Acquisition is 27.38 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.42 per unit of risk. If you would invest 7.00 in IB Acquisition Corp on November 2, 2024 and sell it today you would lose (1.19) from holding IB Acquisition Corp or give up 17.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
IB Acquisition Corp vs. Dow Jones Industrial
Performance |
| Timeline |
IB Acquisition and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
IB Acquisition Corp
Pair trading matchups for IB Acquisition
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with IB Acquisition and Dow Jones
The main advantage of trading using opposite IB Acquisition and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IB Acquisition position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| IB Acquisition vs. flyExclusive, | IB Acquisition vs. Elmos Semiconductor SE | IB Acquisition vs. Vishay Intertechnology | IB Acquisition vs. Taiwan Semiconductor Manufacturing |
| Dow Jones vs. Boston Properties | Dow Jones vs. Suntory Beverage Food | Dow Jones vs. Envista Holdings Corp | Dow Jones vs. Fevertree Drinks Plc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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