Correlation Between International Business and Paragon Technologies
Can any of the company-specific risk be diversified away by investing in both International Business and Paragon Technologies 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 Paragon Technologies 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 Paragon Technologies, you can compare the effects of market volatilities on International Business and Paragon Technologies 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 Paragon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Paragon Technologies.
Diversification Opportunities for International Business and Paragon Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Paragon is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Paragon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Technologies 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 Paragon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Technologies has no effect on the direction of International Business i.e., International Business and Paragon Technologies go up and down completely randomly.
Pair Corralation between International Business and Paragon Technologies
Considering the 90-day investment horizon International Business is expected to generate 2.99 times less return on investment than Paragon Technologies. But when comparing it to its historical volatility, International Business Machines is 3.17 times less risky than Paragon Technologies. It trades about 0.25 of its potential returns per unit of risk. Paragon Technologies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Paragon Technologies on August 29, 2024 and sell it today you would earn a total of 150.00 from holding Paragon Technologies or generate 25.0% 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. Paragon Technologies
Performance |
| Timeline |
| International Business |
| Paragon Technologies |
International Business and Paragon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Paragon Technologies
The main advantage of trading using opposite International Business and Paragon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Paragon Technologies 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 Paragon Technologies will offset losses from the drop in Paragon Technologies' long position.| International Business vs. Data Storage Corp | International Business vs. Usio Inc | International Business vs. ARB IOT Group | International Business vs. FiscalNote Holdings |
| Paragon Technologies vs. Boxlight Corp Class | Paragon Technologies vs. Siyata Mobile | Paragon Technologies vs. ClearOne | Paragon Technologies vs. HUMANA INC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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