Correlation Between Indutrade and Integrated Diagnostics

Can any of the company-specific risk be diversified away by investing in both Indutrade and Integrated Diagnostics 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 Indutrade and Integrated Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indutrade AB and Integrated Diagnostics Holdings, you can compare the effects of market volatilities on Indutrade and Integrated Diagnostics 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 Indutrade with a short position of Integrated Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Integrated Diagnostics.

Diversification Opportunities for Indutrade and Integrated Diagnostics

-0.51

Correlation Coefficient

Indutrade  Integrated Diagnostics

Excellent diversification

The 3 months correlation between Indutrade and Integrated is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Integrated Diagnostics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Diagnostics and Indutrade 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 Indutrade AB are associated (or correlated) with Integrated Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Diagnostics has no effect on the direction of Indutrade i.e., Indutrade and Integrated Diagnostics go up and down completely randomly.

Pair Corralation between Indutrade and Integrated Diagnostics

Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.43 times more return on investment than Integrated Diagnostics. However, Indutrade AB is 2.32 times less risky than Integrated Diagnostics. It trades about 0.05 of its potential returns per unit of risk. Integrated Diagnostics Holdings is currently generating about -0.13 per unit of risk. If you would invest  27,950  in Indutrade AB on December 26, 2024 and sell it today you would earn a total of  1,170  from holding Indutrade AB or generate 4.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Indutrade AB  vs.  Integrated Diagnostics Holding

Indutrade AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Indutrade AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Indutrade is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Integrated Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Indutrade and Integrated Diagnostics

The main advantage of trading using opposite Indutrade and Integrated Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Integrated Diagnostics 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 Integrated Diagnostics will offset losses from the drop in Integrated Diagnostics' long position.

The idea behind Indutrade AB and Integrated Diagnostics Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .