Correlation Between International Business and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both International Business and DATAGROUP 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 International Business and DATAGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and DATAGROUP SE, you can compare the effects of market volatilities on International Business and DATAGROUP 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 International Business with a short position of DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and DATAGROUP.
Diversification Opportunities for International Business and DATAGROUP
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and DATAGROUP is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and International Business 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 International Business Machines are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of International Business i.e., International Business and DATAGROUP go up and down completely randomly.
Pair Corralation between International Business and DATAGROUP
Assuming the 90 days trading horizon International Business Machines is expected to generate 0.61 times more return on investment than DATAGROUP. However, International Business Machines is 1.64 times less risky than DATAGROUP. It trades about 0.16 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.01 per unit of risk. If you would invest 15,477 in International Business Machines on October 13, 2024 and sell it today you would earn a total of 5,918 from holding International Business Machines or generate 38.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. DATAGROUP SE
Performance |
| Timeline |
| International Business |
| DATAGROUP SE |
International Business and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and DATAGROUP
The main advantage of trading using opposite International Business and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| International Business vs. Align Technology | International Business vs. Vishay Intertechnology | International Business vs. X FAB Silicon Foundries | International Business vs. Cleanaway Waste Management |
| DATAGROUP vs. Linedata Services SA | DATAGROUP vs. Sch Environnement SA | DATAGROUP vs. CALTAGIRONE EDITORE | DATAGROUP vs. STEEL DYNAMICS |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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