Correlation Between THORNEY TECHS and International Business
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS and International Business 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 THORNEY TECHS and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and International Business Machines, you can compare the effects of market volatilities on THORNEY TECHS and International Business 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 THORNEY TECHS with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and International Business.
Diversification Opportunities for THORNEY TECHS and International Business
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THORNEY and International is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and International Business go up and down completely randomly.
Pair Corralation between THORNEY TECHS and International Business
Assuming the 90 days horizon THORNEY TECHS LTD is expected to generate 2.66 times more return on investment than International Business. However, THORNEY TECHS is 2.66 times more volatile than International Business Machines. It trades about 0.07 of its potential returns per unit of risk. International Business Machines is currently generating about 0.18 per unit of risk. If you would invest 6.75 in THORNEY TECHS LTD on September 4, 2024 and sell it today you would earn a total of 1.00 from holding THORNEY TECHS LTD or generate 14.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
THORNEY TECHS LTD vs. International Business Machine
Performance |
Timeline |
THORNEY TECHS LTD |
International Business |
THORNEY TECHS and International Business Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THORNEY TECHS and International Business
The main advantage of trading using opposite THORNEY TECHS and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
International Business vs. THORNEY TECHS LTD | International Business vs. Zurich Insurance Group | International Business vs. Reinsurance Group of | International Business vs. United Insurance Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Global Correlations Find global opportunities by holding instruments from different markets |