Correlation Between Information Services and CORNISH METALS

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

By analyzing existing cross correlation between Information Services International Dentsu and CORNISH METALS INC, you can compare the effects of market volatilities on Information Services and CORNISH METALS 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 Information Services with a short position of CORNISH METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and CORNISH METALS.

Diversification Opportunities for Information Services and CORNISH METALS

-0.59

Correlation Coefficient

Information Services  CORNISH METALS

Excellent diversification

The 3 months correlation between Information and CORNISH is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati and CORNISH METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNISH METALS INC and Information Services 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 Information Services International Dentsu are associated (or correlated) with CORNISH METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNISH METALS INC has no effect on the direction of Information Services i.e., Information Services and CORNISH METALS go up and down completely randomly.

Pair Corralation between Information Services and CORNISH METALS

Assuming the 90 days horizon Information Services International Dentsu is expected to generate 0.42 times more return on investment than CORNISH METALS. However, Information Services International Dentsu is 2.36 times less risky than CORNISH METALS. It trades about 0.09 of its potential returns per unit of risk. CORNISH METALS INC is currently generating about 0.03 per unit of risk. If you would invest  3,540  in Information Services International Dentsu on December 26, 2024 and sell it today you would earn a total of  360.00  from holding Information Services International Dentsu or generate 10.17% return on investment over 90 days.

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

Information Services Internati  vs.  CORNISH METALS INC

Information Services

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services International Dentsu are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Information Services may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CORNISH METALS INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CORNISH METALS INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CORNISH METALS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Information Services and CORNISH METALS

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

The idea behind Information Services International Dentsu and CORNISH METALS INC 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.