Correlation Between International Flavors and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both International Flavors and Carbios SAS 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 Flavors and Carbios SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Flavors Fragrances and Carbios SAS, you can compare the effects of market volatilities on International Flavors and Carbios SAS 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 Flavors with a short position of Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Flavors and Carbios SAS.
Diversification Opportunities for International Flavors and Carbios SAS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Carbios is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding International Flavors Fragranc and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS and International Flavors 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 Flavors Fragrances are associated (or correlated) with Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of International Flavors i.e., International Flavors and Carbios SAS go up and down completely randomly.
Pair Corralation between International Flavors and Carbios SAS
Considering the 90-day investment horizon International Flavors Fragrances is expected to generate 0.51 times more return on investment than Carbios SAS. However, International Flavors Fragrances is 1.97 times less risky than Carbios SAS. It trades about 0.0 of its potential returns per unit of risk. Carbios SAS is currently generating about -0.05 per unit of risk. If you would invest 9,828 in International Flavors Fragrances on September 16, 2024 and sell it today you would lose (1,088) from holding International Flavors Fragrances or give up 11.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Flavors Fragranc vs. Carbios SAS
Performance |
| Timeline |
| International Flavors |
| Carbios SAS |
International Flavors and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Flavors and Carbios SAS
The main advantage of trading using opposite International Flavors and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Flavors position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| International Flavors vs. LyondellBasell Industries NV | International Flavors vs. Cabot | International Flavors vs. Westlake Chemical | International Flavors vs. Air Products and |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |