Correlation Between International Business and EA Series
Can any of the company-specific risk be diversified away by investing in both International Business and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on International Business and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and EA Series.
Diversification Opportunities for International Business and EA Series
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and FTWO is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of International Business i.e., International Business and EA Series go up and down completely randomly.
Pair Corralation between International Business and EA Series
Considering the 90-day investment horizon International Business Machines is expected to generate 1.39 times more return on investment than EA Series. However, International Business is 1.39 times more volatile than EA Series Trust. It trades about 0.18 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.02 per unit of risk. If you would invest 21,125 in International Business Machines on August 27, 2024 and sell it today you would earn a total of 1,172 from holding International Business Machines or generate 5.55% 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. EA Series Trust
Performance |
| Timeline |
| International Business |
| EA Series Trust |
International Business and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and EA Series
The main advantage of trading using opposite International Business and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| International Business vs. Data Storage Corp | International Business vs. Usio Inc | International Business vs. ARB IOT Group | International Business vs. FiscalNote Holdings |
| EA Series vs. iShares Dividend and | EA Series vs. Martin Currie Sustainable | EA Series vs. VictoryShares THB Mid | EA Series vs. Mast Global Battery |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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