Correlation Between International Flavors and AGC
Can any of the company-specific risk be diversified away by investing in both International Flavors and AGC 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 Flavors and AGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Flavors Fragrances and AGC Inc ADR, you can compare the effects of market volatilities on International Flavors and AGC 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 Flavors with a short position of AGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Flavors and AGC.
Diversification Opportunities for International Flavors and AGC
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and AGC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding International Flavors Fragranc and AGC Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGC Inc ADR and International Flavors 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 Flavors Fragrances are associated (or correlated) with AGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGC Inc ADR has no effect on the direction of International Flavors i.e., International Flavors and AGC go up and down completely randomly.
Pair Corralation between International Flavors and AGC
Considering the 90-day investment horizon International Flavors Fragrances is expected to generate 0.53 times more return on investment than AGC. However, International Flavors Fragrances is 1.9 times less risky than AGC. It trades about 0.02 of its potential returns per unit of risk. AGC Inc ADR is currently generating about -0.01 per unit of risk. If you would invest 7,748 in International Flavors Fragrances on December 2, 2024 and sell it today you would earn a total of 433.00 from holding International Flavors Fragrances or generate 5.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
International Flavors Fragranc vs. AGC Inc ADR
Performance |
Timeline |
International Flavors |
AGC Inc ADR |
International Flavors and AGC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with International Flavors and AGC
The main advantage of trading using opposite International Flavors and AGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Flavors position performs unexpectedly, AGC 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 AGC will offset losses from the drop in AGC's long position.International Flavors vs. LyondellBasell Industries NV | International Flavors vs. Cabot | International Flavors vs. Westlake Chemical | International Flavors vs. Air Products and |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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