Correlation Between International Business and Cascadia Acquisition
Can any of the company-specific risk be diversified away by investing in both International Business and Cascadia Acquisition 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 Cascadia Acquisition 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 Cascadia Acquisition Corp, you can compare the effects of market volatilities on International Business and Cascadia Acquisition 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 Cascadia Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Cascadia Acquisition.
Diversification Opportunities for International Business and Cascadia Acquisition
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Cascadia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Cascadia Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascadia Acquisition Corp 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 Cascadia Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascadia Acquisition Corp has no effect on the direction of International Business i.e., International Business and Cascadia Acquisition go up and down completely randomly.
Pair Corralation between International Business and Cascadia Acquisition
Considering the 90-day investment horizon International Business is expected to generate 104.33 times less return on investment than Cascadia Acquisition. But when comparing it to its historical volatility, International Business Machines is 50.56 times less risky than Cascadia Acquisition. It trades about 0.09 of its potential returns per unit of risk. Cascadia Acquisition Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.27 in Cascadia Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 8.24 from holding Cascadia Acquisition Corp or generate 3051.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.38% |
| Values | Daily Returns |
International Business Machine vs. Cascadia Acquisition Corp
Performance |
| Timeline |
| International Business |
| Cascadia Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Business and Cascadia Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Cascadia Acquisition
The main advantage of trading using opposite International Business and Cascadia Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Cascadia Acquisition 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 Cascadia Acquisition will offset losses from the drop in Cascadia Acquisition'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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