Correlation Between IBEX and Fact
Can any of the company-specific risk be diversified away by investing in both IBEX and Fact 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 IBEX and Fact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX and Fact Inc, you can compare the effects of market volatilities on IBEX and Fact 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 IBEX with a short position of Fact. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX and Fact.
Diversification Opportunities for IBEX and Fact
Pay attention - limited upside
The 3 months correlation between IBEX and Fact is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IBEX and Fact Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fact Inc and IBEX 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 IBEX are associated (or correlated) with Fact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fact Inc has no effect on the direction of IBEX i.e., IBEX and Fact go up and down completely randomly.
Pair Corralation between IBEX and Fact
If you would invest 1,833 in IBEX on August 29, 2024 and sell it today you would earn a total of 247.00 from holding IBEX or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IBEX vs. Fact Inc
Performance |
| Timeline |
| IBEX |
| Fact Inc |
IBEX and Fact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBEX and Fact
The main advantage of trading using opposite IBEX and Fact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX position performs unexpectedly, Fact 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 Fact will offset losses from the drop in Fact's long position.The idea behind IBEX and Fact Inc 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.| Fact vs. Accenture plc | Fact vs. International Business Machines | Fact vs. Infosys Ltd ADR | Fact vs. Fidelity National Information |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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