Correlation Between International Business and United Energy
Can any of the company-specific risk be diversified away by investing in both International Business and United 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 United 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 United Energy Group, you can compare the effects of market volatilities on International Business and United 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 United Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and United Energy.
Diversification Opportunities for International Business and United Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and United Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Energy Group 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 United Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Energy Group has no effect on the direction of International Business i.e., International Business and United Energy go up and down completely randomly.
Pair Corralation between International Business and United Energy
If you would invest 22,265 in International Business Machines on November 28, 2024 and sell it today you would earn a total of 3,319 from holding International Business Machines or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Business Machine vs. United Energy Group
Performance |
| Timeline |
| International Business |
| United Energy Group |
International Business and United Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and United Energy
The main advantage of trading using opposite International Business and United Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, United 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 United Energy will offset losses from the drop in United Energy'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 |
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
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |