Correlation Between Mobius Investment and International Consolidated

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

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

Diversification Opportunities for Mobius Investment and International Consolidated

0.58

Correlation Coefficient

Mobius Investment  International Consolidated

Very weak diversification

The 3 months correlation between Mobius and International is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mobius Investment Trust and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Mobius Investment 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 Mobius Investment Trust are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Mobius Investment i.e., Mobius Investment and International Consolidated go up and down completely randomly.

Pair Corralation between Mobius Investment and International Consolidated

Assuming the 90 days trading horizon Mobius Investment Trust is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Mobius Investment Trust is 2.04 times less risky than International Consolidated. The stock trades about -0.1 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  30,210  in International Consolidated Airlines on December 27, 2024 and sell it today you would lose (650.00) from holding International Consolidated Airlines or give up 2.15% of portfolio value over 90 days.

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

Mobius Investment Trust  vs.  International Consolidated Air

Mobius Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobius Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

International Consolidated

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Consolidated Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, International Consolidated is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mobius Investment and International Consolidated

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

The idea behind Mobius Investment Trust and International Consolidated Airlines 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .