Correlation Between International Business and HUB24

Can any of the company-specific risk be diversified away by investing in both International Business and HUB24 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 HUB24 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 HUB24, you can compare the effects of market volatilities on International Business and HUB24 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 HUB24. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and HUB24.

Diversification Opportunities for International Business and HUB24

0.0

Correlation Coefficient

International Business  HUB24

Pay attention - limited upside

The 3 months correlation between International and HUB24 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and HUB24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUB24 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 HUB24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUB24 has no effect on the direction of International Business i.e., International Business and HUB24 go up and down completely randomly.

Pair Corralation between International Business and HUB24

If you would invest  13,350  in International Business Machines on October 5, 2024 and sell it today you would earn a total of  8,644  from holding International Business Machines or generate 64.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

International Business Machine  vs.  HUB24

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.

HUB24

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUB24 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUB24 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with International Business and HUB24

The main advantage of trading using opposite International Business and HUB24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, HUB24 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 HUB24 will offset losses from the drop in HUB24's long position.

The idea behind International Business Machines and HUB24 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.