Correlation Between International Biotechnology and Electrica
Can any of the company-specific risk be diversified away by investing in both International Biotechnology and Electrica 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 Biotechnology and Electrica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Biotechnology Trust and Electrica SA, you can compare the effects of market volatilities on International Biotechnology and Electrica 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 Biotechnology with a short position of Electrica. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Biotechnology and Electrica.
Diversification Opportunities for International Biotechnology and Electrica
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Electrica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Biotechnology Tr and Electrica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrica SA and International Biotechnology 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 Biotechnology Trust are associated (or correlated) with Electrica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrica SA has no effect on the direction of International Biotechnology i.e., International Biotechnology and Electrica go up and down completely randomly.
Pair Corralation between International Biotechnology and Electrica
If you would invest (100.00) in Electrica SA on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Electrica SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
International Biotechnology Tr vs. Electrica SA
Performance |
| Timeline |
| International Biotechnology |
| Electrica SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Biotechnology and Electrica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Biotechnology and Electrica
The main advantage of trading using opposite International Biotechnology and Electrica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Biotechnology position performs unexpectedly, Electrica 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 Electrica will offset losses from the drop in Electrica's long position.The idea behind International Biotechnology Trust and Electrica SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Electrica vs. Darden Restaurants | Electrica vs. CVS Health Corp | Electrica vs. Various Eateries PLC | Electrica vs. Fulcrum Metals PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |