Correlation Between Informatica and I3 Verticals

Can any of the company-specific risk be diversified away by investing in both Informatica and I3 Verticals 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 Informatica and I3 Verticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Informatica and i3 Verticals, you can compare the effects of market volatilities on Informatica and I3 Verticals 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 Informatica with a short position of I3 Verticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Informatica and I3 Verticals.

Diversification Opportunities for Informatica and I3 Verticals

0.28

Correlation Coefficient

Informatica  I3 Verticals

Modest diversification

The 3 months correlation between Informatica and IIIV is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Informatica and i3 Verticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Verticals and Informatica 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 Informatica are associated (or correlated) with I3 Verticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Verticals has no effect on the direction of Informatica i.e., Informatica and I3 Verticals go up and down completely randomly.

Pair Corralation between Informatica and I3 Verticals

Given the investment horizon of 90 days Informatica is expected to generate 1.48 times less return on investment than I3 Verticals. In addition to that, Informatica is 1.01 times more volatile than i3 Verticals. It trades about 0.05 of its total potential returns per unit of risk. i3 Verticals is currently generating about 0.08 per unit of volatility. If you would invest  2,266  in i3 Verticals on August 30, 2024 and sell it today you would earn a total of  220.00  from holding i3 Verticals or generate 9.71% return on investment over 90 days.

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

Informatica  vs.  i3 Verticals

Informatica

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Informatica may actually be approaching a critical reversion point that can send shares even higher in December 2024.

i3 Verticals

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Verticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, I3 Verticals may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Informatica and I3 Verticals

The main advantage of trading using opposite Informatica and I3 Verticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Informatica position performs unexpectedly, I3 Verticals 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 I3 Verticals will offset losses from the drop in I3 Verticals' long position.

The idea behind Informatica and i3 Verticals 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 Commodity Directory module to find actively traded commodities issued by global exchanges.