Correlation Between INEO Tech and CyberAgent
Can any of the company-specific risk be diversified away by investing in both INEO Tech and CyberAgent 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 INEO Tech and CyberAgent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INEO Tech Corp and CyberAgent ADR, you can compare the effects of market volatilities on INEO Tech and CyberAgent 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 INEO Tech with a short position of CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of INEO Tech and CyberAgent.
Diversification Opportunities for INEO Tech and CyberAgent
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INEO and CyberAgent is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding INEO Tech Corp and CyberAgent ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent ADR and INEO Tech 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 INEO Tech Corp are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent ADR has no effect on the direction of INEO Tech i.e., INEO Tech and CyberAgent go up and down completely randomly.
Pair Corralation between INEO Tech and CyberAgent
Assuming the 90 days horizon INEO Tech Corp is expected to generate 5.57 times more return on investment than CyberAgent. However, INEO Tech is 5.57 times more volatile than CyberAgent ADR. It trades about 0.04 of its potential returns per unit of risk. CyberAgent ADR is currently generating about 0.02 per unit of risk. If you would invest 5.34 in INEO Tech Corp on September 2, 2024 and sell it today you would lose (2.54) from holding INEO Tech Corp or give up 47.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
INEO Tech Corp vs. CyberAgent ADR
Performance |
| Timeline |
| INEO Tech Corp |
| CyberAgent ADR |
INEO Tech and CyberAgent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INEO Tech and CyberAgent
The main advantage of trading using opposite INEO Tech and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INEO Tech position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent's long position.| INEO Tech vs. Kidoz Inc | INEO Tech vs. Marchex | INEO Tech vs. Snipp Interactive | INEO Tech vs. Mirriad Advertising plc |
| CyberAgent vs. Beyond Commerce | CyberAgent vs. Baosheng Media Group | CyberAgent vs. MGO Global Common | CyberAgent vs. CMG Holdings Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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