Correlation Between IVH and Dimensional International

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

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

Diversification Opportunities for IVH and Dimensional International

-0.54

Correlation Coefficient

IVH  Dimensional International

Excellent diversification

The 3 months correlation between IVH and Dimensional is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding IVH and Dimensional International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International and IVH 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 IVH are associated (or correlated) with Dimensional International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of IVH i.e., IVH and Dimensional International go up and down completely randomly.

Pair Corralation between IVH and Dimensional International

If you would invest  1,118  in IVH on September 1, 2024 and sell it today you would earn a total of  0.00  from holding IVH or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

IVH  vs.  Dimensional International High

IVH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IVH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IVH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Dimensional International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional International High has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Dimensional International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IVH and Dimensional International

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

The idea behind IVH and Dimensional International High 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 Stocks Directory module to find actively traded stocks across global markets.