Correlation Between International Business and Conduent
Can any of the company-specific risk be diversified away by investing in both International Business and Conduent 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 Conduent 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 Conduent, you can compare the effects of market volatilities on International Business and Conduent 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 Conduent. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Conduent.
Diversification Opportunities for International Business and Conduent
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Conduent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Conduent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduent 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 Conduent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduent has no effect on the direction of International Business i.e., International Business and Conduent go up and down completely randomly.
Pair Corralation between International Business and Conduent
Considering the 90-day investment horizon International Business Machines is expected to generate 0.4 times more return on investment than Conduent. However, International Business Machines is 2.5 times less risky than Conduent. It trades about 0.05 of its potential returns per unit of risk. Conduent is currently generating about -0.07 per unit of risk. If you would invest 22,441 in International Business Machines on October 25, 2024 and sell it today you would earn a total of 163.00 from holding International Business Machines or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Conduent
Performance |
| Timeline |
| International Business |
| Conduent |
International Business and Conduent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Conduent
The main advantage of trading using opposite International Business and Conduent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Conduent 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 Conduent will offset losses from the drop in Conduent's long position.| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. Fiserv Inc |
| Conduent vs. Fidelity National Information | Conduent vs. International Business Machines | Conduent vs. Kyndryl Holdings | Conduent vs. DXC Technology Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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