Correlation Between Mosaic and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Mosaic and IB Acquisition 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 Mosaic and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mosaic and IB Acquisition Corp, you can compare the effects of market volatilities on Mosaic and IB Acquisition 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 Mosaic with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and IB Acquisition.
Diversification Opportunities for Mosaic and IB Acquisition
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mosaic and IBACR is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and IB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IB Acquisition Corp and Mosaic 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 The Mosaic are associated (or correlated) with IB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IB Acquisition Corp has no effect on the direction of Mosaic i.e., Mosaic and IB Acquisition go up and down completely randomly.
Pair Corralation between Mosaic and IB Acquisition
Considering the 90-day investment horizon Mosaic is expected to generate 2.44 times less return on investment than IB Acquisition. But when comparing it to its historical volatility, The Mosaic is 8.1 times less risky than IB Acquisition. It trades about 0.23 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6.01 in IB Acquisition Corp on November 4, 2024 and sell it today you would lose (0.20) from holding IB Acquisition Corp or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
The Mosaic vs. IB Acquisition Corp
Performance |
| Timeline |
| Mosaic |
| IB Acquisition Corp |
Mosaic and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mosaic and IB Acquisition
The main advantage of trading using opposite Mosaic and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic position performs unexpectedly, IB Acquisition 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 IB Acquisition will offset losses from the drop in IB Acquisition's long position.The idea behind The Mosaic and IB Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IB Acquisition vs. Sensient Technologies | IB Acquisition vs. CF Industries Holdings | IB Acquisition vs. Teleflex Incorporated | IB Acquisition vs. Hawkins |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |