Correlation Between International Business and Harmonic
Can any of the company-specific risk be diversified away by investing in both International Business and Harmonic 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 Harmonic 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 Harmonic, you can compare the effects of market volatilities on International Business and Harmonic 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 Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Harmonic.
Diversification Opportunities for International Business and Harmonic
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Harmonic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic 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 Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of International Business i.e., International Business and Harmonic go up and down completely randomly.
Pair Corralation between International Business and Harmonic
Considering the 90-day investment horizon International Business Machines is expected to generate 0.38 times more return on investment than Harmonic. However, International Business Machines is 2.61 times less risky than Harmonic. It trades about 0.1 of its potential returns per unit of risk. Harmonic is currently generating about 0.01 per unit of risk. If you would invest 13,213 in International Business Machines on August 28, 2024 and sell it today you would earn a total of 9,670 from holding International Business Machines or generate 73.19% 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. Harmonic
Performance |
| Timeline |
| International Business |
| Harmonic |
International Business and Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Harmonic
The main advantage of trading using opposite International Business and Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Harmonic 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 Harmonic will offset losses from the drop in Harmonic's long position.| International Business vs. Data Storage Corp | International Business vs. Usio Inc | International Business vs. ARB IOT Group | International Business vs. FiscalNote Holdings |
| Harmonic vs. Ichor Holdings | Harmonic vs. Fabrinet | Harmonic vs. Hello Group | Harmonic vs. Ultra Clean Holdings |
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.
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