Correlation Between CONSTELLATION and I Mab

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

By analyzing existing cross correlation between CONSTELLATION BRANDS INC and I Mab, you can compare the effects of market volatilities on CONSTELLATION and I Mab 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 CONSTELLATION with a short position of I Mab. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSTELLATION and I Mab.

Diversification Opportunities for CONSTELLATION and I Mab

-0.14

Correlation Coefficient

CONSTELLATION  I Mab

Good diversification

The 3 months correlation between CONSTELLATION and IMAB is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CONSTELLATION BRANDS INC and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab and CONSTELLATION 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 CONSTELLATION BRANDS INC are associated (or correlated) with I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of CONSTELLATION i.e., CONSTELLATION and I Mab go up and down completely randomly.

Pair Corralation between CONSTELLATION and I Mab

Assuming the 90 days trading horizon CONSTELLATION BRANDS INC is expected to under-perform the I Mab. But the bond apears to be less risky and, when comparing its historical volatility, CONSTELLATION BRANDS INC is 8.55 times less risky than I Mab. The bond trades about -0.02 of its potential returns per unit of risk. The I Mab is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  90.00  in I Mab on December 25, 2024 and sell it today you would lose (3.00) from holding I Mab or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CONSTELLATION BRANDS INC  vs.  I Mab

CONSTELLATION BRANDS INC

Risk-Adjusted Performance

Very Weak

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

I Mab

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CONSTELLATION and I Mab

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

The idea behind CONSTELLATION BRANDS INC and I Mab 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.