Correlation Between IQVIA Holdings and RETAIL FOOD

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

By analyzing existing cross correlation between IQVIA Holdings and RETAIL FOOD GROUP, you can compare the effects of market volatilities on IQVIA Holdings and RETAIL FOOD 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 IQVIA Holdings with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQVIA Holdings and RETAIL FOOD.

Diversification Opportunities for IQVIA Holdings and RETAIL FOOD

-0.15

Correlation Coefficient

IQVIA Holdings  RETAIL FOOD

Good diversification

The 3 months correlation between IQVIA and RETAIL is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and IQVIA Holdings 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 IQVIA Holdings are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of IQVIA Holdings i.e., IQVIA Holdings and RETAIL FOOD go up and down completely randomly.

Pair Corralation between IQVIA Holdings and RETAIL FOOD

Assuming the 90 days horizon IQVIA Holdings is expected to generate 0.16 times more return on investment than RETAIL FOOD. However, IQVIA Holdings is 6.15 times less risky than RETAIL FOOD. It trades about -0.08 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.12 per unit of risk. If you would invest  21,510  in IQVIA Holdings on September 13, 2024 and sell it today you would lose (2,375) from holding IQVIA Holdings or give up 11.04% of portfolio value over 90 days.

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

IQVIA Holdings  vs.  RETAIL FOOD GROUP

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

RETAIL FOOD GROUP

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with IQVIA Holdings and RETAIL FOOD

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

The idea behind IQVIA Holdings and RETAIL FOOD GROUP 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.