Correlation Between International Business and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both International Business and SAIHEAT 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 SAIHEAT 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 SAIHEAT Limited, you can compare the effects of market volatilities on International Business and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and SAIHEAT.
Diversification Opportunities for International Business and SAIHEAT
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and SAIHEAT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of International Business i.e., International Business and SAIHEAT go up and down completely randomly.
Pair Corralation between International Business and SAIHEAT
Considering the 90-day investment horizon International Business is expected to generate 2.02 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, International Business Machines is 5.76 times less risky than SAIHEAT. It trades about 0.14 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 82.00 in SAIHEAT Limited on November 2, 2024 and sell it today you would earn a total of 5.00 from holding SAIHEAT Limited or generate 6.1% 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. SAIHEAT Limited
Performance |
| Timeline |
| International Business |
| SAIHEAT Limited |
International Business and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and SAIHEAT
The main advantage of trading using opposite International Business and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT'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 |
| SAIHEAT vs. Douglas Emmett | SAIHEAT vs. Amkor Technology | SAIHEAT vs. InfuSystems Holdings | SAIHEAT vs. RBC Bearings Incorporated |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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