Correlation Between International Consolidated and REYNA SILVER

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

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

Diversification Opportunities for International Consolidated and REYNA SILVER

-0.67

Correlation Coefficient

International Consolidated  REYNA SILVER

Excellent diversification

The 3 months correlation between International and REYNA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and REYNA SILVER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REYNA SILVER P 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 Airlines are associated (or correlated) with REYNA SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REYNA SILVER P has no effect on the direction of International Consolidated i.e., International Consolidated and REYNA SILVER go up and down completely randomly.

Pair Corralation between International Consolidated and REYNA SILVER

Assuming the 90 days horizon International Consolidated Airlines is expected to generate 0.22 times more return on investment than REYNA SILVER. However, International Consolidated Airlines is 4.61 times less risky than REYNA SILVER. It trades about 0.33 of its potential returns per unit of risk. REYNA SILVER P is currently generating about -0.06 per unit of risk. If you would invest  256.00  in International Consolidated Airlines on October 23, 2024 and sell it today you would earn a total of  126.00  from holding International Consolidated Airlines or generate 49.22% return on investment over 90 days.

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

International Consolidated Air  vs.  REYNA SILVER P

International Consolidated

Risk-Adjusted Performance

26 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, International Consolidated reported solid returns over the last few months and may actually be approaching a breakup point.

REYNA SILVER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REYNA SILVER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with International Consolidated and REYNA SILVER

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

The idea behind International Consolidated Airlines and REYNA SILVER P 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.