Correlation Between International Business and GENERAL
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By analyzing existing cross correlation between International Business Machines and GENERAL ELEC CAP, you can compare the effects of market volatilities on International Business and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and GENERAL.
Diversification Opportunities for International Business and GENERAL
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between International and GENERAL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of International Business i.e., International Business and GENERAL go up and down completely randomly.
Pair Corralation between International Business and GENERAL
Considering the 90-day investment horizon International Business Machines is expected to generate 0.37 times more return on investment than GENERAL. However, International Business Machines is 2.74 times less risky than GENERAL. It trades about 0.39 of its potential returns per unit of risk. GENERAL ELEC CAP 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 | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
International Business Machine vs. GENERAL ELEC CAP
Performance |
| Timeline |
| International Business |
| GENERAL ELEC CAP |
International Business and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and GENERAL
The main advantage of trading using opposite International Business and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL'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 |
| GENERAL vs. Daily Journal Corp | GENERAL vs. Molson Coors Brewing | GENERAL vs. Ispire Technology Common | GENERAL vs. Anheuser Busch Inbev |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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