Correlation Between International Paper and Retailing Fund
Can any of the company-specific risk be diversified away by investing in both International Paper and Retailing Fund 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 Paper and Retailing Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Paper and Retailing Fund Investor, you can compare the effects of market volatilities on International Paper and Retailing Fund 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 Paper with a short position of Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Paper and Retailing Fund.
Diversification Opportunities for International Paper and Retailing Fund
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Retailing is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Paper and Retailing Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Investor and International Paper 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 Paper are associated (or correlated) with Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Investor has no effect on the direction of International Paper i.e., International Paper and Retailing Fund go up and down completely randomly.
Pair Corralation between International Paper and Retailing Fund
Allowing for the 90-day total investment horizon International Paper is expected to generate 4.26 times more return on investment than Retailing Fund. However, International Paper is 4.26 times more volatile than Retailing Fund Investor. It trades about 0.32 of its potential returns per unit of risk. Retailing Fund Investor is currently generating about 0.22 per unit of risk. If you would invest 4,818 in International Paper on August 26, 2024 and sell it today you would earn a total of 1,114 from holding International Paper or generate 23.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Paper vs. Retailing Fund Investor
Performance |
| Timeline |
| International Paper |
| Retailing Fund Investor |
International Paper and Retailing Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Paper and Retailing Fund
The main advantage of trading using opposite International Paper and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Paper position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund's long position.| International Paper vs. Sealed Air | International Paper vs. Avery Dennison Corp | International Paper vs. Sonoco Products | International Paper vs. Ball Corporation |
| Retailing Fund vs. International Paper | Retailing Fund vs. O I Glass | Retailing Fund vs. Smurfit WestRock plc | Retailing Fund vs. Driven Brands Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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