Correlation Between ALBIS LEASING and International Business

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

By analyzing existing cross correlation between ALBIS LEASING AG and International Business Machines, you can compare the effects of market volatilities on ALBIS LEASING and International Business 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 ALBIS LEASING with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and International Business.

Diversification Opportunities for ALBIS LEASING and International Business

-0.55

Correlation Coefficient

ALBIS LEASING  International Business

Excellent diversification

The 3 months correlation between ALBIS and International is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and International Business go up and down completely randomly.

Pair Corralation between ALBIS LEASING and International Business

Assuming the 90 days trading horizon ALBIS LEASING is expected to generate 2.41 times less return on investment than International Business. But when comparing it to its historical volatility, ALBIS LEASING AG is 1.45 times less risky than International Business. It trades about 0.07 of its potential returns per unit of risk. International Business Machines is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  11,277  in International Business Machines on October 22, 2024 and sell it today you would earn a total of  10,523  from holding International Business Machines or generate 93.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

ALBIS LEASING AG  vs.  International Business Machine

ALBIS LEASING AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALBIS LEASING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

International Business

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, International Business is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ALBIS LEASING and International Business

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

The idea behind ALBIS LEASING AG and International Business Machines 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.