Correlation Between International Business and Tcc Steel

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

Diversification Opportunities for International Business and Tcc Steel

-0.12

Correlation Coefficient

International Business  Tcc Steel

Good diversification

The 3 months correlation between International and Tcc is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Tcc Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcc Steel 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 Tcc Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcc Steel has no effect on the direction of International Business i.e., International Business and Tcc Steel go up and down completely randomly.

Pair Corralation between International Business and Tcc Steel

Considering the 90-day investment horizon International Business is expected to generate 1.35 times less return on investment than Tcc Steel. But when comparing it to its historical volatility, International Business Machines is 3.95 times less risky than Tcc Steel. It trades about 0.12 of its potential returns per unit of risk. Tcc Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,896,212  in Tcc Steel on October 5, 2024 and sell it today you would earn a total of  843,788  from holding Tcc Steel or generate 44.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

International Business Machine  vs.  Tcc Steel

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 fundamental drivers, International Business is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Tcc Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tcc Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with International Business and Tcc Steel

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

The idea behind International Business Machines and Tcc Steel 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.