Correlation Between Telephone and IHS Holding
Can any of the company-specific risk be diversified away by investing in both Telephone and IHS Holding 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 Telephone and IHS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telephone and Data and IHS Holding, you can compare the effects of market volatilities on Telephone and IHS Holding 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 Telephone with a short position of IHS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telephone and IHS Holding.
Diversification Opportunities for Telephone and IHS Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telephone and IHS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telephone and Data and IHS Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHS Holding and Telephone 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 Telephone and Data are associated (or correlated) with IHS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHS Holding has no effect on the direction of Telephone i.e., Telephone and IHS Holding go up and down completely randomly.
Pair Corralation between Telephone and IHS Holding
Assuming the 90 days trading horizon Telephone is expected to generate 6.72 times less return on investment than IHS Holding. But when comparing it to its historical volatility, Telephone and Data is 1.88 times less risky than IHS Holding. It trades about 0.03 of its potential returns per unit of risk. IHS Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 298.00 in IHS Holding on August 28, 2024 and sell it today you would earn a total of 21.00 from holding IHS Holding or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telephone and Data vs. IHS Holding
Performance |
| Timeline |
| Telephone and Data |
| IHS Holding |
Telephone and IHS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telephone and IHS Holding
The main advantage of trading using opposite Telephone and IHS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telephone position performs unexpectedly, IHS Holding 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 IHS Holding will offset losses from the drop in IHS Holding's long position.| Telephone vs. Telephone and Data | Telephone vs. SiriusPoint | Telephone vs. XOMA Corporation | Telephone vs. Sachem Capital Corp |
| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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