Correlation Between IAC and Fiverr International

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

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

Diversification Opportunities for IAC and Fiverr International

0.14

Correlation Coefficient

IAC  Fiverr International

Average diversification

The 3 months correlation between IAC and Fiverr is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding IAC Inc and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International and IAC 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 IAC Inc are associated (or correlated) with Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of IAC i.e., IAC and Fiverr International go up and down completely randomly.

Pair Corralation between IAC and Fiverr International

Considering the 90-day investment horizon IAC Inc is expected to generate 0.72 times more return on investment than Fiverr International. However, IAC Inc is 1.39 times less risky than Fiverr International. It trades about -0.01 of its potential returns per unit of risk. Fiverr International is currently generating about -0.12 per unit of risk. If you would invest  4,733  in IAC Inc on November 28, 2024 and sell it today you would lose (151.00) from holding IAC Inc or give up 3.19% of portfolio value over 90 days.

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

IAC Inc  vs.  Fiverr International

IAC Inc

Risk-Adjusted Performance

Very Weak

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

Fiverr International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with IAC and Fiverr International

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

The idea behind IAC Inc and Fiverr International 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.