Correlation Between International Business and AMERICAN
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By analyzing existing cross correlation between International Business Machines and AMERICAN HONDA FINANCE, you can compare the effects of market volatilities on International Business and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and AMERICAN.
Diversification Opportunities for International Business and AMERICAN
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and AMERICAN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and AMERICAN HONDA FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HONDA FINANCE 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HONDA FINANCE has no effect on the direction of International Business i.e., International Business and AMERICAN go up and down completely randomly.
Pair Corralation between International Business and AMERICAN
Considering the 90-day investment horizon International Business Machines is expected to generate 0.98 times more return on investment than AMERICAN. However, International Business Machines is 1.02 times less risky than AMERICAN. It trades about -0.05 of its potential returns per unit of risk. AMERICAN HONDA FINANCE is currently generating about -0.2 per unit of risk. If you would invest 25,656 in International Business Machines on December 1, 2024 and sell it today you would lose (412.00) from holding International Business Machines or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Business Machine vs. AMERICAN HONDA FINANCE
Performance |
| Timeline |
| International Business |
| AMERICAN HONDA FINANCE |
International Business and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and AMERICAN
The main advantage of trading using opposite International Business and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings | International Business vs. Innodata |
| AMERICAN vs. SEI Investments | AMERICAN vs. Space Communication | AMERICAN vs. Zhihu Inc ADR | AMERICAN vs. FS KKR Capital |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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