Correlation Between International Investors and Pear Tree
Can any of the company-specific risk be diversified away by investing in both International Investors and Pear Tree 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 Investors and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Pear Tree Polaris, you can compare the effects of market volatilities on International Investors and Pear Tree 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 Investors with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Pear Tree.
Diversification Opportunities for International Investors and Pear Tree
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Pear is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris and International Investors 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 Investors Gold are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of International Investors i.e., International Investors and Pear Tree go up and down completely randomly.
Pair Corralation between International Investors and Pear Tree
Assuming the 90 days horizon International Investors Gold is expected to generate 3.9 times more return on investment than Pear Tree. However, International Investors is 3.9 times more volatile than Pear Tree Polaris. It trades about 0.17 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.16 per unit of risk. If you would invest 1,139 in International Investors Gold on September 14, 2024 and sell it today you would earn a total of 70.00 from holding International Investors Gold or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Pear Tree Polaris
Performance |
| Timeline |
| International Investors |
| Pear Tree Polaris |
International Investors and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Pear Tree
The main advantage of trading using opposite International Investors and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| International Investors vs. Short Precious Metals | International Investors vs. Europac Gold Fund | International Investors vs. Oppenheimer Gold Special | International Investors vs. Fidelity Advisor Gold |
| Pear Tree vs. Essex Environmental Opportunities | Pear Tree vs. Pear Tree Quality | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |