Correlation Between IBF Financial and SynCore Biotechnology

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

By analyzing existing cross correlation between IBF Financial Holdings and SynCore Biotechnology Co, you can compare the effects of market volatilities on IBF Financial and SynCore Biotechnology 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 IBF Financial with a short position of SynCore Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBF Financial and SynCore Biotechnology.

Diversification Opportunities for IBF Financial and SynCore Biotechnology

0.17

Correlation Coefficient

IBF Financial  SynCore Biotechnology

Average diversification

The 3 months correlation between IBF and SynCore is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding IBF Financial Holdings and SynCore Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SynCore Biotechnology and IBF Financial 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 IBF Financial Holdings are associated (or correlated) with SynCore Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SynCore Biotechnology has no effect on the direction of IBF Financial i.e., IBF Financial and SynCore Biotechnology go up and down completely randomly.

Pair Corralation between IBF Financial and SynCore Biotechnology

Assuming the 90 days trading horizon IBF Financial Holdings is expected to generate 0.45 times more return on investment than SynCore Biotechnology. However, IBF Financial Holdings is 2.24 times less risky than SynCore Biotechnology. It trades about 0.01 of its potential returns per unit of risk. SynCore Biotechnology Co is currently generating about -0.07 per unit of risk. If you would invest  1,515  in IBF Financial Holdings on September 29, 2024 and sell it today you would earn a total of  5.00  from holding IBF Financial Holdings or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

IBF Financial Holdings  vs.  SynCore Biotechnology Co

IBF Financial Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IBF Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IBF Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SynCore Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SynCore Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with IBF Financial and SynCore Biotechnology

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

The idea behind IBF Financial Holdings and SynCore Biotechnology Co 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.