Correlation Between International Consolidated and Ijj
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Ijj 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 Consolidated and Ijj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Companies and Ijj Corporation, you can compare the effects of market volatilities on International Consolidated and Ijj 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 Consolidated with a short position of Ijj. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Ijj.
Diversification Opportunities for International Consolidated and Ijj
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Ijj is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Com and Ijj Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ijj Corporation and International Consolidated 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 Consolidated Companies are associated (or correlated) with Ijj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ijj Corporation has no effect on the direction of International Consolidated i.e., International Consolidated and Ijj go up and down completely randomly.
Pair Corralation between International Consolidated and Ijj
Given the investment horizon of 90 days International Consolidated Companies is expected to generate 16.2 times more return on investment than Ijj. However, International Consolidated is 16.2 times more volatile than Ijj Corporation. It trades about 0.27 of its potential returns per unit of risk. Ijj Corporation is currently generating about 0.08 per unit of risk. If you would invest 20.00 in International Consolidated Companies on September 3, 2024 and sell it today you would lose (18.99) from holding International Consolidated Companies or give up 94.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
International Consolidated Com vs. Ijj Corp.
Performance |
| Timeline |
| International Consolidated |
| Ijj Corporation |
International Consolidated and Ijj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Ijj
The main advantage of trading using opposite International Consolidated and Ijj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Ijj 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 Ijj will offset losses from the drop in Ijj's long position.| International Consolidated vs. Cintas | International Consolidated vs. Thomson Reuters Corp | International Consolidated vs. Global Payments | International Consolidated vs. RB Global |
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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