Correlation Between International Business and Alternative Investment
Can any of the company-specific risk be diversified away by investing in both International Business and Alternative Investment 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 Alternative Investment 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 Alternative Investment, you can compare the effects of market volatilities on International Business and Alternative Investment 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 Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Alternative Investment.
Diversification Opportunities for International Business and Alternative Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Alternative is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Alternative Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment 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 Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of International Business i.e., International Business and Alternative Investment go up and down completely randomly.
Pair Corralation between International Business and Alternative Investment
If you would invest 20,879 in International Business Machines on August 30, 2024 and sell it today you would earn a total of 1,813 from holding International Business Machines or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Alternative Investment
Performance |
| Timeline |
| International Business |
| Alternative Investment |
International Business and Alternative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Alternative Investment
The main advantage of trading using opposite International Business and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.| International Business vs. The Hackett Group | International Business vs. Nayax | International Business vs. Formula Systems 1985 | International Business vs. Information Services Group |
| Alternative Investment vs. BBB Foods | Alternative Investment vs. Eldorado Gold Corp | Alternative Investment vs. Tradeweb Markets | Alternative Investment vs. Enersys |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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