Correlation Between MARKET VECTR and IA FINANCIAL

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

By analyzing existing cross correlation between MARKET VECTR RETAIL and IA FINANCIAL P, you can compare the effects of market volatilities on MARKET VECTR and IA FINANCIAL 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 MARKET VECTR with a short position of IA FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and IA FINANCIAL.

Diversification Opportunities for MARKET VECTR and IA FINANCIAL

0.95

Correlation Coefficient

MARKET VECTR  IA FINANCIAL

Almost no diversification

The 3 months correlation between MARKET and 1OD is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL and IA FINANCIAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA FINANCIAL P and MARKET VECTR 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 MARKET VECTR RETAIL are associated (or correlated) with IA FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA FINANCIAL P has no effect on the direction of MARKET VECTR i.e., MARKET VECTR and IA FINANCIAL go up and down completely randomly.

Pair Corralation between MARKET VECTR and IA FINANCIAL

Assuming the 90 days trading horizon MARKET VECTR is expected to generate 1.58 times less return on investment than IA FINANCIAL. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 2.46 times less risky than IA FINANCIAL. It trades about 0.2 of its potential returns per unit of risk. IA FINANCIAL P is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,375  in IA FINANCIAL P on September 29, 2024 and sell it today you would earn a total of  1,325  from holding IA FINANCIAL P or generate 17.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.16%
Values	Daily Returns

MARKET VECTR RETAIL  vs.  IA FINANCIAL P

MARKET VECTR RETAIL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MARKET VECTR RETAIL are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MARKET VECTR may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IA FINANCIAL P

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IA FINANCIAL P are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IA FINANCIAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MARKET VECTR and IA FINANCIAL

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

The idea behind MARKET VECTR RETAIL and IA FINANCIAL P 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.