Correlation Between All Iron and International Consolidated
Can any of the company-specific risk be diversified away by investing in both All Iron and International Consolidated 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 All Iron and International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Iron Re and International Consolidated Airlines, you can compare the effects of market volatilities on All Iron and International Consolidated 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 All Iron with a short position of International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and International Consolidated.
Diversification Opportunities for All Iron and International Consolidated
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between All and International is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and All Iron 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 All Iron Re are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of All Iron i.e., All Iron and International Consolidated go up and down completely randomly.
Pair Corralation between All Iron and International Consolidated
Assuming the 90 days trading horizon All Iron is expected to generate 26.16 times less return on investment than International Consolidated. In addition to that, All Iron is 1.12 times more volatile than International Consolidated Airlines. It trades about 0.0 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.09 per unit of volatility. If you would invest 182.00 in International Consolidated Airlines on August 31, 2024 and sell it today you would earn a total of 132.00 from holding International Consolidated Airlines or generate 72.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
All Iron Re vs. International Consolidated Air
Performance |
| Timeline |
| All Iron Re |
| International Consolidated |
All Iron and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Iron and International Consolidated
The main advantage of trading using opposite All Iron and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Iron position performs unexpectedly, International Consolidated 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 Consolidated will offset losses from the drop in International Consolidated's long position.| All Iron vs. Merlin Properties SOCIMI | All Iron vs. GMP Property SOCIMI | All Iron vs. Castellana Properties Socimi |
| International Consolidated vs. Lyxor UCITS Ibex35 | International Consolidated vs. Metrovacesa SA | International Consolidated vs. Hispanotels Inversiones SOCIMI | International Consolidated vs. Mapfre |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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