Correlation Between Integral Acquisition and 1st Colonial

Can any of the company-specific risk be diversified away by investing in both Integral Acquisition and 1st Colonial 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 Integral Acquisition and 1st Colonial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integral Acquisition 1 and 1st Colonial Bancorp, you can compare the effects of market volatilities on Integral Acquisition and 1st Colonial 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 Integral Acquisition with a short position of 1st Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral Acquisition and 1st Colonial.

Diversification Opportunities for Integral Acquisition and 1st Colonial

-0.64

Correlation Coefficient

Integral Acquisition  1st Colonial

Excellent diversification

The 3 months correlation between Integral and 1st is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Integral Acquisition 1 and 1st Colonial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Colonial Bancorp and Integral Acquisition 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 Integral Acquisition 1 are associated (or correlated) with 1st Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Colonial Bancorp has no effect on the direction of Integral Acquisition i.e., Integral Acquisition and 1st Colonial go up and down completely randomly.

Pair Corralation between Integral Acquisition and 1st Colonial

Given the investment horizon of 90 days Integral Acquisition 1 is expected to generate 0.69 times more return on investment than 1st Colonial. However, Integral Acquisition 1 is 1.46 times less risky than 1st Colonial. It trades about -0.08 of its potential returns per unit of risk. 1st Colonial Bancorp is currently generating about -0.08 per unit of risk. If you would invest  1,110  in Integral Acquisition 1 on September 2, 2024 and sell it today you would lose (32.00) from holding Integral Acquisition 1 or give up 2.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	79.69%
Values	Daily Returns

Integral Acquisition 1  vs.  1st Colonial Bancorp

Integral Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Acquisition 1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Integral Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

1st Colonial Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1st Colonial Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 1st Colonial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integral Acquisition and 1st Colonial

The main advantage of trading using opposite Integral Acquisition and 1st Colonial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral Acquisition position performs unexpectedly, 1st Colonial 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 1st Colonial will offset losses from the drop in 1st Colonial's long position.

The idea behind Integral Acquisition 1 and 1st Colonial Bancorp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.