Correlation Between International Business and NaturalShrimp
Can any of the company-specific risk be diversified away by investing in both International Business and NaturalShrimp 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 NaturalShrimp 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 NaturalShrimp, you can compare the effects of market volatilities on International Business and NaturalShrimp 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 NaturalShrimp. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and NaturalShrimp.
Diversification Opportunities for International Business and NaturalShrimp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and NaturalShrimp is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp 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 NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of International Business i.e., International Business and NaturalShrimp go up and down completely randomly.
Pair Corralation between International Business and NaturalShrimp
Considering the 90-day investment horizon International Business is expected to generate 9.19 times less return on investment than NaturalShrimp. But when comparing it to its historical volatility, International Business Machines is 23.56 times less risky than NaturalShrimp. It trades about 0.25 of its potential returns per unit of risk. NaturalShrimp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.32 in NaturalShrimp on November 5, 2024 and sell it today you would lose (0.30) from holding NaturalShrimp or give up 93.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. NaturalShrimp
Performance |
| Timeline |
| International Business |
| NaturalShrimp |
International Business and NaturalShrimp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and NaturalShrimp
The main advantage of trading using opposite International Business and NaturalShrimp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, NaturalShrimp 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 NaturalShrimp will offset losses from the drop in NaturalShrimp'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 |
| NaturalShrimp vs. AgriFORCE Growing Systems | NaturalShrimp vs. Atlantic Sapphire ASA | NaturalShrimp vs. Village Farms International | NaturalShrimp vs. Australian Agricultural |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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