Correlation Between Integral and Cool

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

By analyzing existing cross correlation between Integral Ad Science and Cool Company, you can compare the effects of market volatilities on Integral and Cool 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 Integral with a short position of Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Cool.

Diversification Opportunities for Integral and Cool

0.16

Correlation Coefficient

Integral  Cool

Average diversification

The 3 months correlation between Integral and Cool is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company and Integral 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 Integral Ad Science are associated (or correlated) with Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Integral i.e., Integral and Cool go up and down completely randomly.

Pair Corralation between Integral and Cool

Considering the 90-day investment horizon Integral Ad Science is expected to generate 1.59 times more return on investment than Cool. However, Integral is 1.59 times more volatile than Cool Company. It trades about 0.02 of its potential returns per unit of risk. Cool Company is currently generating about -0.01 per unit of risk. If you would invest  949.00  in Integral Ad Science on October 10, 2024 and sell it today you would earn a total of  71.00  from holding Integral Ad Science or generate 7.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

Integral Ad Science  vs.  Cool Company

Integral Ad Science

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cool Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cool Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Integral and Cool

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

The idea behind Integral Ad Science and Cool Company 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.