Correlation Between Ikigai Ventures and Investment

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

By analyzing existing cross correlation between Ikigai Ventures and The Investment, you can compare the effects of market volatilities on Ikigai Ventures and Investment 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 Ikigai Ventures with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikigai Ventures and Investment.

Diversification Opportunities for Ikigai Ventures and Investment

0.42

Correlation Coefficient

Ikigai Ventures  Investment

Very weak diversification

The 3 months correlation between Ikigai and Investment is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ikigai Ventures and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Ikigai Ventures 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 Ikigai Ventures are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Ikigai Ventures i.e., Ikigai Ventures and Investment go up and down completely randomly.

Pair Corralation between Ikigai Ventures and Investment

Assuming the 90 days trading horizon Ikigai Ventures is expected to generate 0.98 times more return on investment than Investment. However, Ikigai Ventures is 1.02 times less risky than Investment. It trades about -0.13 of its potential returns per unit of risk. The Investment is currently generating about -0.14 per unit of risk. If you would invest  4,650  in Ikigai Ventures on October 24, 2024 and sell it today you would lose (150.00) from holding Ikigai Ventures or give up 3.23% of portfolio value over 90 days.

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

Ikigai Ventures  vs.  The Investment

Ikigai Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ikigai Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ikigai Ventures is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ikigai Ventures and Investment

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

The idea behind Ikigai Ventures and The Investment 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.