Correlation Between US FOODS and IBEX Technologies
Can any of the company-specific risk be diversified away by investing in both US FOODS and IBEX Technologies 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 US FOODS and IBEX Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US FOODS HOLDING and IBEX Technologies, you can compare the effects of market volatilities on US FOODS and IBEX Technologies 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 US FOODS with a short position of IBEX Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of US FOODS and IBEX Technologies.
Diversification Opportunities for US FOODS and IBEX Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UFH and IBEX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding US FOODS HOLDING and IBEX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Technologies and US FOODS 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 US FOODS HOLDING are associated (or correlated) with IBEX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Technologies has no effect on the direction of US FOODS i.e., US FOODS and IBEX Technologies go up and down completely randomly.
Pair Corralation between US FOODS and IBEX Technologies
Assuming the 90 days trading horizon US FOODS HOLDING is expected to generate 1.21 times more return on investment than IBEX Technologies. However, US FOODS is 1.21 times more volatile than IBEX Technologies. It trades about 0.07 of its potential returns per unit of risk. IBEX Technologies is currently generating about 0.0 per unit of risk. If you would invest 5,200 in US FOODS HOLDING on December 10, 2024 and sell it today you would earn a total of 650.00 from holding US FOODS HOLDING or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.41% |
Values | Daily Returns |
US FOODS HOLDING vs. IBEX Technologies
Performance |
Timeline |
US FOODS HOLDING |
IBEX Technologies |
US FOODS and IBEX Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with US FOODS and IBEX Technologies
The main advantage of trading using opposite US FOODS and IBEX Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US FOODS position performs unexpectedly, IBEX Technologies 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 IBEX Technologies will offset losses from the drop in IBEX Technologies' long position.US FOODS vs. Endeavour Mining PLC | US FOODS vs. MCEWEN MINING INC | US FOODS vs. Corporate Travel Management | US FOODS vs. Globex Mining Enterprises |
IBEX Technologies vs. GWILLI FOOD | IBEX Technologies vs. Khiron Life Sciences | IBEX Technologies vs. BlueScope Steel Limited | IBEX Technologies vs. CALTAGIRONE EDITORE |
Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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