Correlation Between REVO INSURANCE and IQVIA Holdings

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

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

Diversification Opportunities for REVO INSURANCE and IQVIA Holdings

-0.79

Correlation Coefficient

REVO INSURANCE  IQVIA Holdings

Pay attention - limited upside

The 3 months correlation between REVO and IQVIA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and IQVIA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQVIA Holdings and REVO INSURANCE 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 REVO INSURANCE SPA are associated (or correlated) with IQVIA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQVIA Holdings has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and IQVIA Holdings go up and down completely randomly.

Pair Corralation between REVO INSURANCE and IQVIA Holdings

Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.57 times more return on investment than IQVIA Holdings. However, REVO INSURANCE SPA is 1.76 times less risky than IQVIA Holdings. It trades about 0.26 of its potential returns per unit of risk. IQVIA Holdings is currently generating about -0.08 per unit of risk. If you would invest  914.00  in REVO INSURANCE SPA on September 13, 2024 and sell it today you would earn a total of  181.00  from holding REVO INSURANCE SPA or generate 19.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

REVO INSURANCE SPA  vs.  IQVIA Holdings

REVO INSURANCE SPA

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with REVO INSURANCE and IQVIA Holdings

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

The idea behind REVO INSURANCE SPA and IQVIA Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.