Correlation Between International Business and INPOST SA

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

Diversification Opportunities for International Business and INPOST SA

-0.36

Correlation Coefficient

International Business  INPOST SA

Very good diversification

The 3 months correlation between International and INPOST is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO 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 INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of International Business i.e., International Business and INPOST SA go up and down completely randomly.

Pair Corralation between International Business and INPOST SA

Considering the 90-day investment horizon International Business Machines is expected to under-perform the INPOST SA. In addition to that, International Business is 1.26 times more volatile than INPOST SA EO. It trades about -0.21 of its total potential returns per unit of risk. INPOST SA EO is currently generating about 0.09 per unit of volatility. If you would invest  1,627  in INPOST SA EO on October 5, 2024 and sell it today you would earn a total of  26.00  from holding INPOST SA EO or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

International Business Machine  vs.  INPOST SA EO

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.

INPOST SA EO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with International Business and INPOST SA

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

The idea behind International Business Machines and INPOST SA EO 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.