Correlation Between IF Bancorp and Income Opportunity
Can any of the company-specific risk be diversified away by investing in both IF Bancorp and Income Opportunity 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 IF Bancorp and Income Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IF Bancorp and Income Opportunity Realty, you can compare the effects of market volatilities on IF Bancorp and Income Opportunity 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 IF Bancorp with a short position of Income Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IF Bancorp and Income Opportunity.
Diversification Opportunities for IF Bancorp and Income Opportunity
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between IROQ and Income is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding IF Bancorp and Income Opportunity Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Opportunity Realty and IF Bancorp 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 IF Bancorp are associated (or correlated) with Income Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Opportunity Realty has no effect on the direction of IF Bancorp i.e., IF Bancorp and Income Opportunity go up and down completely randomly.
Pair Corralation between IF Bancorp and Income Opportunity
Given the investment horizon of 90 days IF Bancorp is expected to generate 1.2 times more return on investment than Income Opportunity. However, IF Bancorp is 1.2 times more volatile than Income Opportunity Realty. It trades about 0.05 of its potential returns per unit of risk. Income Opportunity Realty is currently generating about -0.11 per unit of risk. If you would invest 2,138 in IF Bancorp on August 31, 2024 and sell it today you would earn a total of 41.00 from holding IF Bancorp or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 54.55% |
| Values | Daily Returns |
IF Bancorp vs. Income Opportunity Realty
Performance |
| Timeline |
| IF Bancorp |
| Income Opportunity Realty |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
IF Bancorp and Income Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IF Bancorp and Income Opportunity
The main advantage of trading using opposite IF Bancorp and Income Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IF Bancorp position performs unexpectedly, Income Opportunity 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 Income Opportunity will offset losses from the drop in Income Opportunity's long position.| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal Bancorp |
| Income Opportunity vs. IF Bancorp | Income Opportunity vs. ICC Holdings | Income Opportunity vs. Home Federal Bancorp | Income Opportunity vs. Lake Shore Bancorp |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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