Correlation Between International Business and Snoogoo Corp

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

Diversification Opportunities for International Business and Snoogoo Corp

0.0

Correlation Coefficient

International Business  Snoogoo Corp

Pay attention - limited upside

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

Pair Corralation between International Business and Snoogoo Corp

If you would invest  22,589  in International Business Machines on December 2, 2024 and sell it today you would earn a total of  2,655  from holding International Business Machines or generate 11.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

International Business Machine  vs.  Snoogoo Corp

International Business

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, International Business displayed solid returns over the last few months and may actually be approaching a breakup point.

Snoogoo Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with International Business and Snoogoo Corp

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

The idea behind International Business Machines and Snoogoo Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.