Correlation Between Ivy International and Pace High

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

By analyzing existing cross correlation between Ivy International E and Pace High Yield, you can compare the effects of market volatilities on Ivy International and Pace High 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 Ivy International with a short position of Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy International and Pace High.

Diversification Opportunities for Ivy International and Pace High

0.75

Correlation Coefficient

Ivy International  Pace High

Poor diversification

The 3 months correlation between Ivy and Pace is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ivy International E and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield and Ivy International 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 Ivy International E are associated (or correlated) with Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Ivy International i.e., Ivy International and Pace High go up and down completely randomly.

Pair Corralation between Ivy International and Pace High

Assuming the 90 days horizon Ivy International E is expected to generate 6.96 times more return on investment than Pace High. However, Ivy International is 6.96 times more volatile than Pace High Yield. It trades about 0.19 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.19 per unit of risk. If you would invest  2,067  in Ivy International E on December 19, 2024 and sell it today you would earn a total of  233.00  from holding Ivy International E or generate 11.27% return on investment over 90 days.

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

Ivy International E  vs.  Pace High Yield

Ivy International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy International E are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ivy International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pace High Yield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pace High Yield are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pace High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ivy International and Pace High

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

The idea behind Ivy International E and Pace High Yield 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.