Correlation Between Equifax and Ipsos SA

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

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

Diversification Opportunities for Equifax and Ipsos SA

0.73

Correlation Coefficient

Equifax  Ipsos SA

Poor diversification

The 3 months correlation between Equifax and Ipsos is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and Ipsos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsos SA and Equifax 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 Equifax are associated (or correlated) with Ipsos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsos SA has no effect on the direction of Equifax i.e., Equifax and Ipsos SA go up and down completely randomly.

Pair Corralation between Equifax and Ipsos SA

If you would invest  6,233  in Ipsos SA on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Ipsos SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Equifax  vs.  Ipsos SA

Equifax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equifax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ipsos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ipsos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ipsos SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Equifax and Ipsos SA

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

The idea behind Equifax and Ipsos SA 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.