Correlation Between Shutterstock and IAC
Can any of the company-specific risk be diversified away by investing in both Shutterstock and IAC 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 Shutterstock and IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shutterstock and IAC Inc, you can compare the effects of market volatilities on Shutterstock and IAC 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 Shutterstock with a short position of IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shutterstock and IAC.
Diversification Opportunities for Shutterstock and IAC
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shutterstock and IAC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shutterstock and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc and Shutterstock 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 Shutterstock are associated (or correlated) with IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of Shutterstock i.e., Shutterstock and IAC go up and down completely randomly.
Pair Corralation between Shutterstock and IAC
Given the investment horizon of 90 days Shutterstock is expected to generate 0.74 times more return on investment than IAC. However, Shutterstock is 1.36 times less risky than IAC. It trades about -0.06 of its potential returns per unit of risk. IAC Inc is currently generating about -0.09 per unit of risk. If you would invest 3,312 in Shutterstock on August 31, 2024 and sell it today you would lose (135.00) from holding Shutterstock or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shutterstock vs. IAC Inc
Performance |
| Timeline |
| Shutterstock |
| IAC Inc |
Shutterstock and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shutterstock and IAC
The main advantage of trading using opposite Shutterstock and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shutterstock position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC's long position.| Shutterstock vs. Yelp Inc | Shutterstock vs. Match Group | Shutterstock vs. Snap Inc | Shutterstock vs. Onfolio 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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