Correlation Between International Consolidated and Exmar NV

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

By analyzing existing cross correlation between International Consolidated Companies and Exmar NV, you can compare the effects of market volatilities on International Consolidated and Exmar NV 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 Exmar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Exmar NV.

Diversification Opportunities for International Consolidated and Exmar NV

-0.1

Correlation Coefficient

International Consolidated  Exmar NV

Good diversification

The 3 months correlation between International and Exmar is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Com and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV 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 Companies are associated (or correlated) with Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of International Consolidated i.e., International Consolidated and Exmar NV go up and down completely randomly.

Pair Corralation between International Consolidated and Exmar NV

Given the investment horizon of 90 days International Consolidated Companies is expected to generate 60.88 times more return on investment than Exmar NV. However, International Consolidated is 60.88 times more volatile than Exmar NV. It trades about 0.27 of its potential returns per unit of risk. Exmar NV is currently generating about 0.08 per unit of risk. If you would invest  40.00  in International Consolidated Companies on October 11, 2024 and sell it today you would lose (35.78) from holding International Consolidated Companies or give up 89.45% of portfolio value over 90 days.

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

International Consolidated Com  vs.  Exmar NV

International Consolidated

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Companies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Exmar NV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Exmar NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Consolidated and Exmar NV

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

The idea behind International Consolidated Companies and Exmar NV 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.