Correlation Between BII Railway and IBEX Technologies
Can any of the company-specific risk be diversified away by investing in both BII Railway and IBEX Technologies 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 BII Railway and IBEX Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and IBEX Technologies, you can compare the effects of market volatilities on BII Railway and IBEX Technologies 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 BII Railway with a short position of IBEX Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and IBEX Technologies.
Diversification Opportunities for BII Railway and IBEX Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BII and IBEX is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and IBEX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Technologies and BII Railway 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 BII Railway Transportation are associated (or correlated) with IBEX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Technologies has no effect on the direction of BII Railway i.e., BII Railway and IBEX Technologies go up and down completely randomly.
Pair Corralation between BII Railway and IBEX Technologies
Assuming the 90 days horizon BII Railway is expected to generate 32.03 times less return on investment than IBEX Technologies. But when comparing it to its historical volatility, BII Railway Transportation is 13.35 times less risky than IBEX Technologies. It trades about 0.02 of its potential returns per unit of risk. IBEX Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 77.00 in IBEX Technologies on October 4, 2024 and sell it today you would earn a total of 68,123 from holding IBEX Technologies or generate 88471.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BII Railway Transportation vs. IBEX Technologies
Performance |
Timeline |
BII Railway Transpor |
IBEX Technologies |
BII Railway and IBEX Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BII Railway and IBEX Technologies
The main advantage of trading using opposite BII Railway and IBEX Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, IBEX Technologies 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 IBEX Technologies will offset losses from the drop in IBEX Technologies' long position.BII Railway vs. NMI Holdings | BII Railway vs. SIVERS SEMICONDUCTORS AB | BII Railway vs. Talanx AG | BII Railway vs. NorAm Drilling AS |
IBEX Technologies vs. AAC TECHNOLOGHLDGADR | IBEX Technologies vs. GRIFFIN MINING LTD | IBEX Technologies vs. GALENA MINING LTD | IBEX Technologies vs. Major Drilling Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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