Correlation Between International Consolidated and Mineral Financial

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

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

Diversification Opportunities for International Consolidated and Mineral Financial

0.54

Correlation Coefficient

International Consolidated  Mineral Financial

Very weak diversification

The 3 months correlation between International and Mineral is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Mineral Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineral Financial and International Consolidated 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 International Consolidated Airlines are associated (or correlated) with Mineral Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineral Financial has no effect on the direction of International Consolidated i.e., International Consolidated and Mineral Financial go up and down completely randomly.

Pair Corralation between International Consolidated and Mineral Financial

Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 0.59 times more return on investment than Mineral Financial. However, International Consolidated Airlines is 1.7 times less risky than Mineral Financial. It trades about 0.08 of its potential returns per unit of risk. Mineral Financial Investments is currently generating about -0.01 per unit of risk. If you would invest  16,022  in International Consolidated Airlines on October 11, 2024 and sell it today you would earn a total of  14,658  from holding International Consolidated Airlines or generate 91.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

International Consolidated Air  vs.  Mineral Financial Investments

International Consolidated

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mineral Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mineral Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with International Consolidated and Mineral Financial

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

The idea behind International Consolidated Airlines and Mineral Financial Investments 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..