Correlation Between International Business and SPI Energy
Can any of the company-specific risk be diversified away by investing in both International Business and SPI Energy 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 SPI Energy 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 SPI Energy Co, you can compare the effects of market volatilities on International Business and SPI Energy 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 SPI Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and SPI Energy.
Diversification Opportunities for International Business and SPI Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and SPI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and SPI Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPI Energy 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 SPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPI Energy has no effect on the direction of International Business i.e., International Business and SPI Energy go up and down completely randomly.
Pair Corralation between International Business and SPI Energy
Considering the 90-day investment horizon International Business Machines is expected to generate 0.2 times more return on investment than SPI Energy. However, International Business Machines is 4.91 times less risky than SPI Energy. It trades about 0.39 of its potential returns per unit of risk. SPI Energy Co is currently generating about -0.19 per unit of risk. If you would invest 20,330 in International Business Machines on August 31, 2024 and sell it today you would earn a total of 2,362 from holding International Business Machines or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. SPI Energy Co
Performance |
| Timeline |
| International Business |
| SPI Energy |
International Business and SPI Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and SPI Energy
The main advantage of trading using opposite International Business and SPI Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, SPI Energy 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 SPI Energy will offset losses from the drop in SPI Energy's long position.| International Business vs. RLJ Lodging Trust | International Business vs. Aquagold International | International Business vs. Stepstone Group | International Business vs. Morningstar Unconstrained Allocation |
| SPI Energy vs. Ascent Solar Technologies, | SPI Energy vs. Emeren Group | SPI Energy vs. Sunrun Inc | SPI Energy vs. Sunnova Energy 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |