Correlation Between GRENKELEASING Dusseldorf and International Business

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

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

Diversification Opportunities for GRENKELEASING Dusseldorf and International Business

0.17

Correlation Coefficient

GRENKELEASING Dusseldorf  International Business

Average diversification

The 3 months correlation between GRENKELEASING and International is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf i.e., GRENKELEASING Dusseldorf and International Business go up and down completely randomly.

Pair Corralation between GRENKELEASING Dusseldorf and International Business

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the International Business. In addition to that, GRENKELEASING Dusseldorf is 1.42 times more volatile than International Business Machines. It trades about -0.05 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.06 per unit of volatility. If you would invest  21,213  in International Business Machines on December 29, 2024 and sell it today you would earn a total of  1,547  from holding International Business Machines or generate 7.29% return on investment over 90 days.

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

GRENKELEASING Dusseldorf  vs.  International Business Machine

GRENKELEASING Dusseldorf

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRENKELEASING Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward-looking indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

International Business

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, International Business may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GRENKELEASING Dusseldorf and International Business

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

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.