Correlation Between Century Wind and IEI Integration

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

By analyzing existing cross correlation between Century Wind Power and IEI Integration Corp, you can compare the effects of market volatilities on Century Wind and IEI Integration 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 Century Wind with a short position of IEI Integration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and IEI Integration.

Diversification Opportunities for Century Wind and IEI Integration

-0.23

Correlation Coefficient

Century Wind  IEI Integration

Very good diversification

The 3 months correlation between Century and IEI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and IEI Integration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IEI Integration Corp and Century Wind 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 Century Wind Power are associated (or correlated) with IEI Integration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IEI Integration Corp has no effect on the direction of Century Wind i.e., Century Wind and IEI Integration go up and down completely randomly.

Pair Corralation between Century Wind and IEI Integration

Assuming the 90 days trading horizon Century Wind Power is expected to under-perform the IEI Integration. In addition to that, Century Wind is 1.03 times more volatile than IEI Integration Corp. It trades about -0.11 of its total potential returns per unit of risk. IEI Integration Corp is currently generating about 0.0 per unit of volatility. If you would invest  8,110  in IEI Integration Corp on September 22, 2024 and sell it today you would lose (230.00) from holding IEI Integration Corp or give up 2.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.22%
Values	Daily Returns

Century Wind Power  vs.  IEI Integration Corp

Century Wind Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Century Wind Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

IEI Integration Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IEI Integration Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IEI Integration is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Century Wind and IEI Integration

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

The idea behind Century Wind Power and IEI Integration Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.