Correlation Between BANK CENTRAL and International Business

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

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

Diversification Opportunities for BANK CENTRAL and International Business

0.0

Correlation Coefficient

BANK CENTRAL  International Business

Pay attention - limited upside

The 3 months correlation between BANK and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and BANK CENTRAL 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 BANK CENTRAL ASIA 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 BANK CENTRAL i.e., BANK CENTRAL and International Business go up and down completely randomly.

Pair Corralation between BANK CENTRAL and International Business

If you would invest  59.00  in BANK CENTRAL ASIA on October 4, 2024 and sell it today you would earn a total of  0.00  from holding BANK CENTRAL ASIA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

BANK CENTRAL ASIA  vs.  International Business Machine

BANK CENTRAL ASIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK CENTRAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

International Business

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. 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 BANK CENTRAL and International Business

The main advantage of trading using opposite BANK CENTRAL and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL 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 BANK CENTRAL ASIA 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.