Correlation Between International Flavors and Gevo
Can any of the company-specific risk be diversified away by investing in both International Flavors and Gevo 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 Gevo 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 Gevo Inc, you can compare the effects of market volatilities on International Flavors and Gevo 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 Gevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Flavors and Gevo.
Diversification Opportunities for International Flavors and Gevo
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Gevo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding International Flavors Fragranc and Gevo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gevo Inc 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 Gevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gevo Inc has no effect on the direction of International Flavors i.e., International Flavors and Gevo go up and down completely randomly.
Pair Corralation between International Flavors and Gevo
Considering the 90-day investment horizon International Flavors Fragrances is expected to under-perform the Gevo. But the stock apears to be less risky and, when comparing its historical volatility, International Flavors Fragrances is 5.1 times less risky than Gevo. The stock trades about -0.09 of its potential returns per unit of risk. The Gevo Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 73.00 in Gevo Inc on September 2, 2024 and sell it today you would earn a total of 92.00 from holding Gevo Inc or generate 126.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Flavors Fragranc vs. Gevo Inc
Performance |
| Timeline |
| International Flavors |
| Gevo Inc |
International Flavors and Gevo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Flavors and Gevo
The main advantage of trading using opposite International Flavors and Gevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Flavors position performs unexpectedly, Gevo 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 Gevo will offset losses from the drop in Gevo's long position.| International Flavors vs. LyondellBasell Industries NV | International Flavors vs. Cabot | International Flavors vs. Westlake Chemical | International Flavors vs. Air Products and |
| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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