Correlation Between Integral and 8426EPAD0

Can any of the company-specific risk be diversified away by investing in both Integral and 8426EPAD0 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 8426EPAD0 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 US8426EPAD09, you can compare the effects of market volatilities on Integral and 8426EPAD0 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 8426EPAD0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and 8426EPAD0.

Diversification Opportunities for Integral and 8426EPAD0

-0.08

Correlation Coefficient

Integral  8426EPAD0

Good diversification

The 3 months correlation between Integral and 8426EPAD0 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and US8426EPAD09 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US8426EPAD09 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 8426EPAD0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US8426EPAD09 has no effect on the direction of Integral i.e., Integral and 8426EPAD0 go up and down completely randomly.

Pair Corralation between Integral and 8426EPAD0

Considering the 90-day investment horizon Integral Ad Science is expected to generate 3.71 times more return on investment than 8426EPAD0. However, Integral is 3.71 times more volatile than US8426EPAD09. It trades about 0.03 of its potential returns per unit of risk. US8426EPAD09 is currently generating about 0.01 per unit of risk. If you would invest  879.00  in Integral Ad Science on September 20, 2024 and sell it today you would earn a total of  162.50  from holding Integral Ad Science or generate 18.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.21%
Values	Daily Returns

Integral Ad Science  vs.  US8426EPAD09

Integral Ad Science

Risk-Adjusted Performance

0 of 100

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 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.

US8426EPAD09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US8426EPAD09 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Bond's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for US8426EPAD09 shareholders.

Pair Trading with Integral and 8426EPAD0

The main advantage of trading using opposite Integral and 8426EPAD0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral position performs unexpectedly, 8426EPAD0 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 8426EPAD0 will offset losses from the drop in 8426EPAD0's long position.

The idea behind Integral Ad Science and US8426EPAD09 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.