Correlation Between Integral and New Era

Can any of the company-specific risk be diversified away by investing in both Integral and New Era 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 New Era 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 New Era Helium, you can compare the effects of market volatilities on Integral and New Era 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 New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and New Era.

Diversification Opportunities for Integral and New Era

0.31

Correlation Coefficient

Integral  New Era

Weak diversification

The 3 months correlation between Integral and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and New Era Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Helium 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 New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Helium has no effect on the direction of Integral i.e., Integral and New Era go up and down completely randomly.

Pair Corralation between Integral and New Era

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the New Era. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 4.86 times less risky than New Era. The stock trades about -0.09 of its potential returns per unit of risk. The New Era Helium is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  265.00  in New Era Helium on December 19, 2024 and sell it today you would lose (36.00) from holding New Era Helium or give up 13.58% of portfolio value over 90 days.

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

Integral Ad Science  vs.  New Era Helium

Integral Ad Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integral Ad Science 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

New Era Helium

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in New Era Helium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, New Era exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integral and New Era

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

The idea behind Integral Ad Science and New Era Helium 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.