Correlation Between International Consolidated and Artec Consulting

Can any of the company-specific risk be diversified away by investing in both International Consolidated and Artec Consulting 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 Consolidated and Artec Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Consolidated Airlines and Artec Consulting Corp, you can compare the effects of market volatilities on International Consolidated and Artec Consulting 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 Consolidated with a short position of Artec Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Artec Consulting.

Diversification Opportunities for International Consolidated and Artec Consulting

0.0

Correlation Coefficient

International Consolidated  Artec Consulting

Pay attention - limited upside

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

Pair Corralation between International Consolidated and Artec Consulting

If you would invest  551.00  in International Consolidated Airlines on October 26, 2024 and sell it today you would earn a total of  268.00  from holding International Consolidated Airlines or generate 48.64% return on investment over 90 days.

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

International Consolidated Air  vs.  Artec Consulting Corp

International Consolidated

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, International Consolidated showed solid returns over the last few months and may actually be approaching a breakup point.

Artec Consulting Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artec Consulting Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Artec Consulting is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with International Consolidated and Artec Consulting

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

The idea behind International Consolidated Airlines and Artec Consulting 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.