Correlation Between International Business and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both International Business and Vivendi SA 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 Vivendi SA 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 Vivendi SA, you can compare the effects of market volatilities on International Business and Vivendi SA 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 Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Vivendi SA.
Diversification Opportunities for International Business and Vivendi SA
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Vivendi is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA 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 Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of International Business i.e., International Business and Vivendi SA go up and down completely randomly.
Pair Corralation between International Business and Vivendi SA
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 Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
International Business Machine vs. Vivendi SA
Performance |
| Timeline |
| International Business |
| Vivendi SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
International Business and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Vivendi SA
The main advantage of trading using opposite International Business and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA'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 |
| Vivendi SA vs. Universal Music Group | Vivendi SA vs. Reservoir Media | Vivendi SA vs. Atlanta Braves Holdings, | Vivendi SA vs. Warner Music Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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