Correlation Between International Business and Minehub Technologies

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

By analyzing existing cross correlation between International Business Machines and Minehub Technologies, you can compare the effects of market volatilities on International Business and Minehub Technologies 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 International Business with a short position of Minehub Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Minehub Technologies.

Diversification Opportunities for International Business and Minehub Technologies

-0.55

Correlation Coefficient

International Business  Minehub Technologies

Excellent diversification

The 3 months correlation between International and Minehub is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Minehub Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minehub Technologies and International Business 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 International Business Machines are associated (or correlated) with Minehub Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minehub Technologies has no effect on the direction of International Business i.e., International Business and Minehub Technologies go up and down completely randomly.

Pair Corralation between International Business and Minehub Technologies

Assuming the 90 days trading horizon International Business is expected to generate 1.65 times less return on investment than Minehub Technologies. But when comparing it to its historical volatility, International Business Machines is 2.81 times less risky than Minehub Technologies. It trades about 0.13 of its potential returns per unit of risk. Minehub Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Minehub Technologies on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Minehub Technologies or generate 10.0% return on investment over 90 days.

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

International Business Machine  vs.  Minehub Technologies

International Business

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, International Business is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Minehub Technologies

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with International Business and Minehub Technologies

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

The idea behind International Business Machines and Minehub Technologies 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..