Correlation Between First Abacus and Integrated Micro

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

By analyzing existing cross correlation between First Abacus Financial and Integrated Micro Electronics, you can compare the effects of market volatilities on First Abacus and Integrated Micro 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 First Abacus with a short position of Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Integrated Micro.

Diversification Opportunities for First Abacus and Integrated Micro

-0.28

Correlation Coefficient

First Abacus  Integrated Micro

Very good diversification

The 3 months correlation between First and Integrated is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and First Abacus 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 First Abacus Financial are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of First Abacus i.e., First Abacus and Integrated Micro go up and down completely randomly.

Pair Corralation between First Abacus and Integrated Micro

Assuming the 90 days trading horizon First Abacus Financial is expected to generate 2.29 times more return on investment than Integrated Micro. However, First Abacus is 2.29 times more volatile than Integrated Micro Electronics. It trades about 0.0 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.11 per unit of risk. If you would invest  67.00  in First Abacus Financial on September 30, 2024 and sell it today you would lose (2.00) from holding First Abacus Financial or give up 2.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

First Abacus Financial  vs.  Integrated Micro Electronics

First Abacus Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Abacus Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, First Abacus is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Micro Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with First Abacus and Integrated Micro

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

The idea behind First Abacus Financial and Integrated Micro Electronics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.