Correlation Between International Business and CSE Global
Can any of the company-specific risk be diversified away by investing in both International Business and CSE Global 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 CSE Global 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 CSE Global Limited, you can compare the effects of market volatilities on International Business and CSE Global 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 CSE Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and CSE Global.
Diversification Opportunities for International Business and CSE Global
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and CSE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and CSE Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSE Global Limited 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 CSE Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSE Global Limited has no effect on the direction of International Business i.e., International Business and CSE Global go up and down completely randomly.
Pair Corralation between International Business and CSE Global
Considering the 90-day investment horizon International Business is expected to generate 3.05 times less return on investment than CSE Global. But when comparing it to its historical volatility, International Business Machines is 3.43 times less risky than CSE Global. It trades about 0.08 of its potential returns per unit of risk. CSE Global Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 30.00 in CSE Global Limited on October 26, 2024 and sell it today you would earn a total of 4.00 from holding CSE Global Limited or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. CSE Global Limited
Performance |
| Timeline |
| International Business |
| CSE Global Limited |
International Business and CSE Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and CSE Global
The main advantage of trading using opposite International Business and CSE Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, CSE Global 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 CSE Global will offset losses from the drop in CSE Global'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 |
| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |