Correlation Between TopBuild Corp and Internacional

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

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

Diversification Opportunities for TopBuild Corp and Internacional

0.0

Correlation Coefficient

TopBuild Corp  Internacional

Pay attention - limited upside

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

Pair Corralation between TopBuild Corp and Internacional

If you would invest  427,000  in TopBuild Corp on September 5, 2024 and sell it today you would earn a total of  383,759  from holding TopBuild Corp or generate 89.87% return on investment over 90 days.

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

TopBuild Corp  vs.  Internacional de Cermica

TopBuild Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TopBuild Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, TopBuild Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Internacional de Cermica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Internacional de Cermica has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Internacional is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TopBuild Corp and Internacional

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

The idea behind TopBuild Corp and Internacional de Cermica 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 CEOs Directory module to screen CEOs from public companies around the world.