Correlation Between Scotts and International Business
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By analyzing existing cross correlation between Scotts Miracle Gro 525 and International Business Machines, you can compare the effects of market volatilities on Scotts and International Business 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 Scotts with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts and International Business.
Diversification Opportunities for Scotts and International Business
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scotts and International is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro 525 and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Scotts 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 Scotts Miracle Gro 525 are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Scotts i.e., Scotts and International Business go up and down completely randomly.
Pair Corralation between Scotts and International Business
Assuming the 90 days trading horizon Scotts Miracle Gro 525 is expected to under-perform the International Business. But the bond apears to be less risky and, when comparing its historical volatility, Scotts Miracle Gro 525 is 1.69 times less risky than International Business. The bond trades about -0.08 of its potential returns per unit of risk. The International Business Machines is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 21,668 in International Business Machines on August 25, 2024 and sell it today you would earn a total of 629.00 from holding International Business Machines or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Scotts Miracle Gro 525 vs. International Business Machine
Performance |
| Timeline |
| Scotts Miracle Gro |
| International Business |
Scotts and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotts and International Business
The main advantage of trading using opposite Scotts and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Scotts vs. The Coca Cola | Scotts vs. JPMorgan Chase Co | Scotts vs. Dupont De Nemours | Scotts vs. Alcoa Corp |
| International Business vs. CDW Corp | International Business vs. Eshallgo Class A | International Business vs. Amtech Systems | International Business vs. Gold Fields Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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