Correlation Between Interactive Brokers and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers and Lonza 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 Interactive Brokers and Lonza Group 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 Lonza Group, you can compare the effects of market volatilities on Interactive Brokers and Lonza 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 Interactive Brokers with a short position of Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Lonza Group.
Diversification Opportunities for Interactive Brokers and Lonza Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interactive and Lonza is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and Lonza Group go up and down completely randomly.
Pair Corralation between Interactive Brokers and Lonza Group
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 1.03 times more return on investment than Lonza Group. However, Interactive Brokers is 1.03 times more volatile than Lonza Group. It trades about 0.4 of its potential returns per unit of risk. Lonza Group is currently generating about -0.01 per unit of risk. If you would invest 15,373 in Interactive Brokers Group on September 3, 2024 and sell it today you would earn a total of 3,736 from holding Interactive Brokers Group or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interactive Brokers Group vs. Lonza Group
Performance |
| Timeline |
| Interactive Brokers |
| Lonza Group |
Interactive Brokers and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and Lonza Group
The main advantage of trading using opposite Interactive Brokers and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers position performs unexpectedly, Lonza 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 Lonza Group will offset losses from the drop in Lonza Group's long position.| Interactive Brokers vs. Grocery Outlet Holding | Interactive Brokers vs. Western Union Co | Interactive Brokers vs. Olympic Steel | Interactive Brokers vs. GMS Inc |
| Lonza Group vs. China New Energy | Lonza Group vs. Sonic Healthcare Ltd | Lonza Group vs. Charles River Laboratories | Lonza Group vs. Qiagen NV |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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