Correlation Between International Business and N Able
Can any of the company-specific risk be diversified away by investing in both International Business and N Able 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 N Able 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 N Able Inc, you can compare the effects of market volatilities on International Business and N Able 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 N Able. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and N Able.
Diversification Opportunities for International Business and N Able
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and NABL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and N Able Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Able Inc 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 N Able. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Able Inc has no effect on the direction of International Business i.e., International Business and N Able go up and down completely randomly.
Pair Corralation between International Business and N Able
Considering the 90-day investment horizon International Business Machines is expected to generate 0.92 times more return on investment than N Able. However, International Business Machines is 1.08 times less risky than N Able. It trades about 0.12 of its potential returns per unit of risk. N Able Inc is currently generating about -0.03 per unit of risk. If you would invest 15,463 in International Business Machines on September 2, 2024 and sell it today you would earn a total of 7,278 from holding International Business Machines or generate 47.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. N Able Inc
Performance |
| Timeline |
| International Business |
| N Able Inc |
International Business and N Able Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and N Able
The main advantage of trading using opposite International Business and N Able positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, N Able 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 N Able will offset losses from the drop in N Able's long position.| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings |
| N Able vs. ExlService Holdings | N Able vs. ASGN Inc | N Able vs. Parsons Corp | N Able vs. CACI International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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