Correlation Between International Business and Immersion
Can any of the company-specific risk be diversified away by investing in both International Business and Immersion 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 Immersion 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 Immersion, you can compare the effects of market volatilities on International Business and Immersion 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 Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Immersion.
Diversification Opportunities for International Business and Immersion
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Immersion is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Immersion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion has no effect on the direction of International Business i.e., International Business and Immersion go up and down completely randomly.
Pair Corralation between International Business and Immersion
Considering the 90-day investment horizon International Business Machines is expected to under-perform the Immersion. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines is 1.17 times less risky than Immersion. The stock trades about -0.07 of its potential returns per unit of risk. The Immersion is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Immersion on August 24, 2024 and sell it today you would earn a total of 31.00 from holding Immersion or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Immersion
Performance |
| Timeline |
| International Business |
| Immersion |
International Business and Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Immersion
The main advantage of trading using opposite International Business and Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Immersion 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 Immersion will offset losses from the drop in Immersion's long position.| International Business vs. Small Cap Core | International Business vs. Morningstar Unconstrained Allocation | International Business vs. Mutual Of America | International Business vs. Ep Emerging Markets |
| Immersion vs. Meridianlink | Immersion vs. CoreCard Corp | Immersion vs. Enfusion | Immersion vs. Alkami Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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