Correlation Between Sure Tech and IBI Inv

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

By analyzing existing cross correlation between Sure Tech Investments LP and IBI Inv House, you can compare the effects of market volatilities on Sure Tech and IBI Inv 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 Sure Tech with a short position of IBI Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and IBI Inv.

Diversification Opportunities for Sure Tech and IBI Inv

0.31

Correlation Coefficient

Sure Tech  IBI Inv

Weak diversification

The 3 months correlation between Sure and IBI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and IBI Inv House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBI Inv House and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with IBI Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBI Inv House has no effect on the direction of Sure Tech i.e., Sure Tech and IBI Inv go up and down completely randomly.

Pair Corralation between Sure Tech and IBI Inv

Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the IBI Inv. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 1.29 times less risky than IBI Inv. The stock trades about -0.04 of its potential returns per unit of risk. The IBI Inv House is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,594,000  in IBI Inv House on December 28, 2024 and sell it today you would earn a total of  328,000  from holding IBI Inv House or generate 20.58% return on investment over 90 days.

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

Sure Tech Investments LP  vs.  IBI Inv House

Sure Tech Investments

Risk-Adjusted Performance

Very Weak

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

IBI Inv House

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IBI Inv House are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, IBI Inv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sure Tech and IBI Inv

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

The idea behind Sure Tech Investments LP and IBI Inv House 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.