Correlation Between International Flavors and Iofina Plc
Can any of the company-specific risk be diversified away by investing in both International Flavors and Iofina Plc 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 Iofina Plc 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 Iofina plc, you can compare the effects of market volatilities on International Flavors and Iofina Plc 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 Iofina Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Flavors and Iofina Plc.
Diversification Opportunities for International Flavors and Iofina Plc
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Iofina is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding International Flavors Fragranc and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc 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 Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of International Flavors i.e., International Flavors and Iofina Plc go up and down completely randomly.
Pair Corralation between International Flavors and Iofina Plc
Considering the 90-day investment horizon International Flavors Fragrances is expected to generate 0.62 times more return on investment than Iofina Plc. However, International Flavors Fragrances is 1.62 times less risky than Iofina Plc. It trades about -0.05 of its potential returns per unit of risk. Iofina plc is currently generating about -0.29 per unit of risk. If you would invest 8,943 in International Flavors Fragrances on September 13, 2024 and sell it today you would lose (133.00) from holding International Flavors Fragrances or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Flavors Fragranc vs. Iofina plc
Performance |
| Timeline |
| International Flavors |
| Iofina plc |
International Flavors and Iofina Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Flavors and Iofina Plc
The main advantage of trading using opposite International Flavors and Iofina Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Flavors position performs unexpectedly, Iofina Plc 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 Iofina Plc will offset losses from the drop in Iofina Plc's long position.| International Flavors vs. LyondellBasell Industries NV | International Flavors vs. Cabot | International Flavors vs. Westlake Chemical | International Flavors vs. Air Products and |
| Iofina Plc vs. Chemours Co | Iofina Plc vs. International Flavors Fragrances | Iofina Plc vs. Air Products and | Iofina Plc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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