Correlation Between Ibiden CoLtd and AT S

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

By analyzing existing cross correlation between Ibiden CoLtd and AT S Austria, you can compare the effects of market volatilities on Ibiden CoLtd and AT S 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 Ibiden CoLtd with a short position of AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ibiden CoLtd and AT S.

Diversification Opportunities for Ibiden CoLtd and AT S

0.47

Correlation Coefficient

Ibiden CoLtd  AT S

Very weak diversification

The 3 months correlation between Ibiden and AUS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ibiden CoLtd and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and Ibiden CoLtd 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 Ibiden CoLtd are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Ibiden CoLtd i.e., Ibiden CoLtd and AT S go up and down completely randomly.

Pair Corralation between Ibiden CoLtd and AT S

Assuming the 90 days horizon Ibiden CoLtd is expected to generate 0.69 times more return on investment than AT S. However, Ibiden CoLtd is 1.44 times less risky than AT S. It trades about -0.06 of its potential returns per unit of risk. AT S Austria is currently generating about -0.33 per unit of risk. If you would invest  2,880  in Ibiden CoLtd on September 22, 2024 and sell it today you would lose (240.00) from holding Ibiden CoLtd or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.78%
Values	Daily Returns

Ibiden CoLtd  vs.  AT S Austria

Ibiden CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ibiden CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ibiden CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AT S Austria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AT S Austria has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ibiden CoLtd and AT S

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

The idea behind Ibiden CoLtd and AT S Austria 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.