Correlation Between IPC MEXICO and EBay
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and eBay Inc, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and EBay.
Diversification Opportunities for IPC MEXICO and EBay
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPC and EBay is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and EBay go up and down completely randomly.
Pair Corralation between IPC MEXICO and EBay
Assuming the 90 days trading horizon IPC MEXICO is expected to generate 18.85 times less return on investment than EBay. But when comparing it to its historical volatility, IPC MEXICO is 1.82 times less risky than EBay. It trades about 0.01 of its potential returns per unit of risk. eBay Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 83,304 in eBay Inc on September 4, 2024 and sell it today you would earn a total of 46,196 from holding eBay Inc or generate 55.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.83% |
| Values | Daily Returns |
IPC MEXICO vs. eBay Inc
Performance |
| Timeline |
IPC MEXICO and EBay Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
eBay Inc
Pair trading matchups for EBay
Pair Trading with IPC MEXICO and EBay
The main advantage of trading using opposite IPC MEXICO and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. McEwen Mining | IPC MEXICO vs. Prudential Financial | IPC MEXICO vs. Verizon Communications | IPC MEXICO vs. The Bank of |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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