Correlation Between IBC Advanced and GDI Integrated
Can any of the company-specific risk be diversified away by investing in both IBC Advanced and GDI Integrated 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 IBC Advanced and GDI Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBC Advanced Alloys and GDI Integrated, you can compare the effects of market volatilities on IBC Advanced and GDI Integrated 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 IBC Advanced with a short position of GDI Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBC Advanced and GDI Integrated.
Diversification Opportunities for IBC Advanced and GDI Integrated
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBC and GDI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding IBC Advanced Alloys and GDI Integrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Integrated and IBC Advanced 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 IBC Advanced Alloys are associated (or correlated) with GDI Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Integrated has no effect on the direction of IBC Advanced i.e., IBC Advanced and GDI Integrated go up and down completely randomly.
Pair Corralation between IBC Advanced and GDI Integrated
Given the investment horizon of 90 days IBC Advanced Alloys is expected to generate 11.14 times more return on investment than GDI Integrated. However, IBC Advanced is 11.14 times more volatile than GDI Integrated. It trades about 0.07 of its potential returns per unit of risk. GDI Integrated is currently generating about 0.05 per unit of risk. If you would invest 9.00 in IBC Advanced Alloys on January 20, 2024 and sell it today you would earn a total of 0.50 from holding IBC Advanced Alloys or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBC Advanced Alloys vs. GDI Integrated
Performance |
| Timeline |
| IBC Advanced Alloys |
| GDI Integrated |
IBC Advanced and GDI Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBC Advanced and GDI Integrated
The main advantage of trading using opposite IBC Advanced and GDI Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBC Advanced position performs unexpectedly, GDI Integrated 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 GDI Integrated will offset losses from the drop in GDI Integrated's long position.| IBC Advanced vs. Atlas Engineered Products | IBC Advanced vs. Fab Form Industries | IBC Advanced vs. Imaflex | IBC Advanced vs. Bri Chem Corp |
| GDI Integrated vs. Pollard Banknote Limited | GDI Integrated vs. mdf Commerce | GDI Integrated vs. Evertz Technologies Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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