Correlation Between Ideanomics and Deere
Can any of the company-specific risk be diversified away by investing in both Ideanomics and Deere 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 Ideanomics and Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ideanomics and Deere Company, you can compare the effects of market volatilities on Ideanomics and Deere 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 Ideanomics with a short position of Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ideanomics and Deere.
Diversification Opportunities for Ideanomics and Deere
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ideanomics and Deere is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and Ideanomics 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 Ideanomics are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Ideanomics i.e., Ideanomics and Deere go up and down completely randomly.
Pair Corralation between Ideanomics and Deere
Given the investment horizon of 90 days Ideanomics is expected to generate 106.12 times more return on investment than Deere. However, Ideanomics is 106.12 times more volatile than Deere Company. It trades about 0.21 of its potential returns per unit of risk. Deere Company is currently generating about 0.14 per unit of risk. If you would invest 27.00 in Ideanomics on November 2, 2024 and sell it today you would lose (26.89) from holding Ideanomics or give up 99.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Ideanomics vs. Deere Company
Performance |
| Timeline |
| Ideanomics |
| Deere Company |
Ideanomics and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ideanomics and Deere
The main advantage of trading using opposite Ideanomics and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ideanomics position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| Ideanomics vs. Deere Company | Ideanomics vs. Caterpillar | Ideanomics vs. Xos Inc | Ideanomics vs. Nikola Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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