Correlation Between Interactive Brokers and Close Brothers
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers and Close Brothers 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 Interactive Brokers and Close Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interactive Brokers Group and Close Brothers Group, you can compare the effects of market volatilities on Interactive Brokers and Close Brothers 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 Interactive Brokers with a short position of Close Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Close Brothers.
Diversification Opportunities for Interactive Brokers and Close Brothers
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interactive and Close is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and Close Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Close Brothers Group and Interactive Brokers 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 Interactive Brokers Group are associated (or correlated) with Close Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Close Brothers Group has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and Close Brothers go up and down completely randomly.
Pair Corralation between Interactive Brokers and Close Brothers
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 0.73 times more return on investment than Close Brothers. However, Interactive Brokers Group is 1.37 times less risky than Close Brothers. It trades about 0.37 of its potential returns per unit of risk. Close Brothers Group is currently generating about -0.22 per unit of risk. If you would invest 15,424 in Interactive Brokers Group on August 31, 2024 and sell it today you would earn a total of 3,707 from holding Interactive Brokers Group or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interactive Brokers Group vs. Close Brothers Group
Performance |
| Timeline |
| Interactive Brokers |
| Close Brothers Group |
Interactive Brokers and Close Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and Close Brothers
The main advantage of trading using opposite Interactive Brokers and Close Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers position performs unexpectedly, Close Brothers 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 Close Brothers will offset losses from the drop in Close Brothers' long position.| Interactive Brokers vs. United Homes Group | Interactive Brokers vs. Dine Brands Global | Interactive Brokers vs. Aegean Airlines SA | Interactive Brokers vs. Ryanair Holdings PLC |
| Close Brothers vs. Peoples Bancorp | Close Brothers vs. Primis Financial Corp | Close Brothers vs. ConnectOne Bancorp | Close Brothers vs. LINKBANCORP |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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