Correlation Between IPE Universal and Fastbase

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

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

Diversification Opportunities for IPE Universal and Fastbase

0.09

Correlation Coefficient

IPE Universal  Fastbase

Significant diversification

The 3 months correlation between IPE and Fastbase is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding IPE Universal and Fastbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastbase and IPE Universal 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 IPE Universal are associated (or correlated) with Fastbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastbase has no effect on the direction of IPE Universal i.e., IPE Universal and Fastbase go up and down completely randomly.

Pair Corralation between IPE Universal and Fastbase

Given the investment horizon of 90 days IPE Universal is expected to under-perform the Fastbase. But the pink sheet apears to be less risky and, when comparing its historical volatility, IPE Universal is 2.03 times less risky than Fastbase. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Fastbase is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Fastbase on October 12, 2024 and sell it today you would lose (20.00) from holding Fastbase or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

IPE Universal  vs.  Fastbase

IPE Universal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IPE Universal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fastbase

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fastbase are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Fastbase exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPE Universal and Fastbase

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

The idea behind IPE Universal and Fastbase 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.