Correlation Between Interactive Brokers and ProConcept Marketing

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

By analyzing existing cross correlation between Interactive Brokers Group and ProConcept Marketing Group, you can compare the effects of market volatilities on Interactive Brokers and ProConcept Marketing 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 Interactive Brokers with a short position of ProConcept Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and ProConcept Marketing.

Diversification Opportunities for Interactive Brokers and ProConcept Marketing

0.29

Correlation Coefficient

Interactive Brokers  ProConcept Marketing

Modest diversification

The 3 months correlation between Interactive and ProConcept is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and ProConcept Marketing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProConcept Marketing and Interactive Brokers 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 Interactive Brokers Group are associated (or correlated) with ProConcept Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProConcept Marketing has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and ProConcept Marketing go up and down completely randomly.

Pair Corralation between Interactive Brokers and ProConcept Marketing

Given the investment horizon of 90 days Interactive Brokers Group is expected to under-perform the ProConcept Marketing. But the stock apears to be less risky and, when comparing its historical volatility, Interactive Brokers Group is 4.69 times less risky than ProConcept Marketing. The stock trades about -0.09 of its potential returns per unit of risk. The ProConcept Marketing Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  5.70  in ProConcept Marketing Group on December 2, 2024 and sell it today you would earn a total of  3.30  from holding ProConcept Marketing Group or generate 57.89% return on investment over 90 days.

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

Interactive Brokers Group  vs.  ProConcept Marketing Group

Interactive Brokers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interactive Brokers Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking signals, Interactive Brokers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ProConcept Marketing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProConcept Marketing Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ProConcept Marketing displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Interactive Brokers and ProConcept Marketing

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

The idea behind Interactive Brokers Group and ProConcept Marketing Group 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.