Correlation Between Information Services and EBay
Can any of the company-specific risk be diversified away by investing in both Information Services and EBay 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 Information Services and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services International Dentsu and eBay Inc, you can compare the effects of market volatilities on Information Services and EBay 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 Information Services with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and EBay.
Diversification Opportunities for Information Services and EBay
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Information and EBay is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Information Services 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 Information Services International Dentsu are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Information Services i.e., Information Services and EBay go up and down completely randomly.
Pair Corralation between Information Services and EBay
Assuming the 90 days horizon Information Services is expected to generate 1.45 times less return on investment than EBay. In addition to that, Information Services is 1.12 times more volatile than eBay Inc. It trades about 0.07 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.11 per unit of volatility. If you would invest 5,855 in eBay Inc on August 28, 2024 and sell it today you would earn a total of 366.00 from holding eBay Inc or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Internati vs. eBay Inc
Performance |
| Timeline |
| Information Services |
| eBay Inc |
Information Services and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and EBay
The main advantage of trading using opposite Information Services and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| Information Services vs. Accenture plc | Information Services vs. Cognizant Technology Solutions | Information Services vs. Superior Plus Corp | Information Services vs. NMI Holdings |
| EBay vs. Superior Plus Corp | EBay vs. NMI Holdings | EBay vs. Origin Agritech | EBay vs. SIVERS SEMICONDUCTORS AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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