Correlation Between Income Financial and Bird Construction

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

By analyzing existing cross correlation between Income Financial Trust and Bird Construction, you can compare the effects of market volatilities on Income Financial and Bird Construction 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 Income Financial with a short position of Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Financial and Bird Construction.

Diversification Opportunities for Income Financial and Bird Construction

-0.36

Correlation Coefficient

Income Financial  Bird Construction

Very good diversification

The 3 months correlation between Income and Bird is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Income Financial Trust and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction and Income Financial 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 Income Financial Trust are associated (or correlated) with Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Income Financial i.e., Income Financial and Bird Construction go up and down completely randomly.

Pair Corralation between Income Financial and Bird Construction

Assuming the 90 days trading horizon Income Financial Trust is expected to under-perform the Bird Construction. But the stock apears to be less risky and, when comparing its historical volatility, Income Financial Trust is 1.03 times less risky than Bird Construction. The stock trades about 0.0 of its potential returns per unit of risk. The Bird Construction is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  784.00  in Bird Construction on October 10, 2024 and sell it today you would earn a total of  1,610  from holding Bird Construction or generate 205.36% return on investment over 90 days.

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

Income Financial Trust  vs.  Bird Construction

Income Financial Trust

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Income Financial Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Income Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bird Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Income Financial and Bird Construction

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

The idea behind Income Financial Trust and Bird Construction 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.