Correlation Between IBEX Technologies and CSL
Can any of the company-specific risk be diversified away by investing in both IBEX Technologies and CSL 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 IBEX Technologies and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX Technologies and CSL LTD SPONADR, you can compare the effects of market volatilities on IBEX Technologies and CSL 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 IBEX Technologies with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX Technologies and CSL.
Diversification Opportunities for IBEX Technologies and CSL
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IBEX and CSL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding IBEX Technologies and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR and IBEX Technologies 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 IBEX Technologies are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of IBEX Technologies i.e., IBEX Technologies and CSL go up and down completely randomly.
Pair Corralation between IBEX Technologies and CSL
Assuming the 90 days horizon IBEX Technologies is expected to generate 0.93 times more return on investment than CSL. However, IBEX Technologies is 1.07 times less risky than CSL. It trades about 0.01 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about -0.07 per unit of risk. If you would invest 69,000 in IBEX Technologies on October 13, 2024 and sell it today you would earn a total of 200.00 from holding IBEX Technologies or generate 0.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.77% |
Values | Daily Returns |
IBEX Technologies vs. CSL LTD SPONADR
Performance |
Timeline |
IBEX Technologies |
CSL LTD SPONADR |
IBEX Technologies and CSL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IBEX Technologies and CSL
The main advantage of trading using opposite IBEX Technologies and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX Technologies position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.IBEX Technologies vs. Performance Food Group | ||
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Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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