Correlation Between International Business and Perficient
Can any of the company-specific risk be diversified away by investing in both International Business and Perficient 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 Perficient 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 Perficient, you can compare the effects of market volatilities on International Business and Perficient 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 Perficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Perficient.
Diversification Opportunities for International Business and Perficient
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Perficient is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient 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 Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of International Business i.e., International Business and Perficient go up and down completely randomly.
Pair Corralation between International Business and Perficient
Considering the 90-day investment horizon International Business Machines is expected to generate 0.35 times more return on investment than Perficient. However, International Business Machines is 2.88 times less risky than Perficient. It trades about 0.14 of its potential returns per unit of risk. Perficient is currently generating about 0.02 per unit of risk. If you would invest 11,485 in International Business Machines on August 29, 2024 and sell it today you would earn a total of 11,398 from holding International Business Machines or generate 99.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.08% |
| Values | Daily Returns |
International Business Machine vs. Perficient
Performance |
| Timeline |
| International Business |
| Perficient |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
International Business and Perficient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Perficient
The main advantage of trading using opposite International Business and Perficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Perficient 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 Perficient will offset losses from the drop in Perficient'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 |
| Perficient vs. WNS Holdings | Perficient vs. Genpact Limited | Perficient vs. ASGN Inc | Perficient 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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