Correlation Between Alphabet and IFIN Old

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

By analyzing existing cross correlation between Alphabet Inc Class A and IFIN Old, you can compare the effects of market volatilities on Alphabet and IFIN Old 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 Alphabet with a short position of IFIN Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and IFIN Old.

Diversification Opportunities for Alphabet and IFIN Old

0.0

Correlation Coefficient

Alphabet  IFIN Old

Pay attention - limited upside

The 3 months correlation between Alphabet and IFIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class A and IFIN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFIN Old and Alphabet 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 Alphabet Inc Class A are associated (or correlated) with IFIN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFIN Old has no effect on the direction of Alphabet i.e., Alphabet and IFIN Old go up and down completely randomly.

Pair Corralation between Alphabet and IFIN Old

Assuming the 90 days horizon Alphabet Inc Class A is expected to generate 0.13 times more return on investment than IFIN Old. However, Alphabet Inc Class A is 7.6 times less risky than IFIN Old. It trades about 0.07 of its potential returns per unit of risk. IFIN Old is currently generating about -0.15 per unit of risk. If you would invest  16,853  in Alphabet Inc Class A on October 9, 2024 and sell it today you would earn a total of  2,834  from holding Alphabet Inc Class A or generate 16.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	47.88%
Values	Daily Returns

Alphabet Inc Class A  vs.  IFIN Old

Alphabet Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Alphabet disclosed solid returns over the last few months and may actually be approaching a breakup point.

IFIN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFIN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, IFIN Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Alphabet and IFIN Old

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

The idea behind Alphabet Inc Class A and IFIN Old 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.