Correlation Between IFabric Corp and Bri Chem
Can any of the company-specific risk be diversified away by investing in both IFabric Corp and Bri Chem 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 IFabric Corp and Bri Chem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iFabric Corp and Bri Chem Corp, you can compare the effects of market volatilities on IFabric Corp and Bri Chem 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 IFabric Corp with a short position of Bri Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of IFabric Corp and Bri Chem.
Diversification Opportunities for IFabric Corp and Bri Chem
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IFabric and Bri is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding iFabric Corp and Bri Chem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bri Chem Corp and IFabric Corp 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 iFabric Corp are associated (or correlated) with Bri Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bri Chem Corp has no effect on the direction of IFabric Corp i.e., IFabric Corp and Bri Chem go up and down completely randomly.
Pair Corralation between IFabric Corp and Bri Chem
Assuming the 90 days trading horizon iFabric Corp is expected to under-perform the Bri Chem. But the stock apears to be less risky and, when comparing its historical volatility, iFabric Corp is 2.48 times less risky than Bri Chem. The stock trades about -0.01 of its potential returns per unit of risk. The Bri Chem Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Bri Chem Corp on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Bri Chem Corp or generate 54.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iFabric Corp vs. Bri Chem Corp
Performance |
| Timeline |
| iFabric Corp |
| Bri Chem Corp |
IFabric Corp and Bri Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IFabric Corp and Bri Chem
The main advantage of trading using opposite IFabric Corp and Bri Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IFabric Corp position performs unexpectedly, Bri Chem 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 Bri Chem will offset losses from the drop in Bri Chem's long position.| IFabric Corp vs. Caldwell Partners International | IFabric Corp vs. Bri Chem Corp | IFabric Corp vs. Geodrill Limited | IFabric Corp vs. Supremex |
| Bri Chem vs. PHX Energy Services | Bri Chem vs. CES Energy Solutions | Bri Chem vs. Total Energy Services | Bri Chem vs. Pason Systems |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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