Correlation Between International Business and Kaya Holdings

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

Diversification Opportunities for International Business and Kaya Holdings

-0.02

Correlation Coefficient

International Business  Kaya Holdings

Good diversification

The 3 months correlation between International and Kaya is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Kaya Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaya Holdings 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 Kaya Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaya Holdings has no effect on the direction of International Business i.e., International Business and Kaya Holdings go up and down completely randomly.

Pair Corralation between International Business and Kaya Holdings

Considering the 90-day investment horizon International Business Machines is expected to generate 0.18 times more return on investment than Kaya Holdings. However, International Business Machines is 5.54 times less risky than Kaya Holdings. It trades about -0.01 of its potential returns per unit of risk. Kaya Holdings is currently generating about -0.03 per unit of risk. If you would invest  22,535  in International Business Machines on October 6, 2024 and sell it today you would lose (270.00) from holding International Business Machines or give up 1.2% of portfolio value over 90 days.

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

International Business Machine  vs.  Kaya Holdings

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 current stock price disarray, may contribute to short-term losses for the investors.

Kaya Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaya Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with International Business and Kaya Holdings

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

The idea behind International Business Machines and Kaya Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.