Correlation Between IBI Mutual and Highcon Systems

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

By analyzing existing cross correlation between IBI Mutual Funds and Highcon Systems, you can compare the effects of market volatilities on IBI Mutual and Highcon Systems 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 IBI Mutual with a short position of Highcon Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBI Mutual and Highcon Systems.

Diversification Opportunities for IBI Mutual and Highcon Systems

-0.85

Correlation Coefficient

IBI Mutual  Highcon Systems

Pay attention - limited upside

The 3 months correlation between IBI and Highcon is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding IBI Mutual Funds and Highcon Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highcon Systems and IBI Mutual 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 IBI Mutual Funds are associated (or correlated) with Highcon Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highcon Systems has no effect on the direction of IBI Mutual i.e., IBI Mutual and Highcon Systems go up and down completely randomly.

Pair Corralation between IBI Mutual and Highcon Systems

Assuming the 90 days trading horizon IBI Mutual Funds is expected to generate 0.42 times more return on investment than Highcon Systems. However, IBI Mutual Funds is 2.38 times less risky than Highcon Systems. It trades about -0.01 of its potential returns per unit of risk. Highcon Systems is currently generating about -0.01 per unit of risk. If you would invest  7,240  in IBI Mutual Funds on September 27, 2024 and sell it today you would lose (150.00) from holding IBI Mutual Funds or give up 2.07% of portfolio value over 90 days.

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

IBI Mutual Funds  vs.  Highcon Systems

IBI Mutual Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Highcon Systems

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IBI Mutual and Highcon Systems

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

The idea behind IBI Mutual Funds and Highcon Systems 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.