Correlation Between IEI Integration and Alcor Micro

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

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

Diversification Opportunities for IEI Integration and Alcor Micro

0.0

Correlation Coefficient

IEI Integration  Alcor Micro

Pay attention - limited upside

The 3 months correlation between IEI and Alcor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Alcor Micro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcor Micro and IEI Integration 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 IEI Integration Corp are associated (or correlated) with Alcor Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcor Micro has no effect on the direction of IEI Integration i.e., IEI Integration and Alcor Micro go up and down completely randomly.

Pair Corralation between IEI Integration and Alcor Micro

Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 0.47 times more return on investment than Alcor Micro. However, IEI Integration Corp is 2.14 times less risky than Alcor Micro. It trades about 0.01 of its potential returns per unit of risk. Alcor Micro is currently generating about -0.28 per unit of risk. If you would invest  7,660  in IEI Integration Corp on October 20, 2024 and sell it today you would earn a total of  10.00  from holding IEI Integration Corp or generate 0.13% return on investment over 90 days.

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

IEI Integration Corp  vs.  Alcor Micro

IEI Integration Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IEI Integration Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Alcor Micro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alcor Micro 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with IEI Integration and Alcor Micro

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

The idea behind IEI Integration Corp and Alcor Micro 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..