Correlation Between INFORMATION SVC and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and SERI INDUSTRIAL 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 INFORMATION SVC and SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on INFORMATION SVC and SERI INDUSTRIAL 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 INFORMATION SVC with a short position of SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and SERI INDUSTRIAL.
Diversification Opportunities for INFORMATION SVC and SERI INDUSTRIAL
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between INFORMATION and SERI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between INFORMATION SVC and SERI INDUSTRIAL
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 0.58 times more return on investment than SERI INDUSTRIAL. However, INFORMATION SVC GRP is 1.72 times less risky than SERI INDUSTRIAL. It trades about -0.02 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.04 per unit of risk. If you would invest 427.00 in INFORMATION SVC GRP on November 30, 2024 and sell it today you would lose (129.00) from holding INFORMATION SVC GRP or give up 30.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| INFORMATION SVC GRP |
| SERI INDUSTRIAL EO |
INFORMATION SVC and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and SERI INDUSTRIAL
The main advantage of trading using opposite INFORMATION SVC and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| INFORMATION SVC vs. Guangdong Investment Limited | INFORMATION SVC vs. Constellation Software | INFORMATION SVC vs. New Residential Investment | INFORMATION SVC vs. Kingdee International Software |
| SERI INDUSTRIAL vs. FUYO GENERAL LEASE | SERI INDUSTRIAL vs. GungHo Online Entertainment | SERI INDUSTRIAL vs. CARSALESCOM | SERI INDUSTRIAL vs. Salesforce |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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