Correlation Between Integral and Interface

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

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

Diversification Opportunities for Integral and Interface

0.83

Correlation Coefficient

Integral  Interface

Very poor diversification

The 3 months correlation between Integral and Interface is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface and Integral 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 Integral Ad Science are associated (or correlated) with Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Integral i.e., Integral and Interface go up and down completely randomly.

Pair Corralation between Integral and Interface

Considering the 90-day investment horizon Integral Ad Science is expected to generate 1.02 times more return on investment than Interface. However, Integral is 1.02 times more volatile than Interface. It trades about 0.15 of its potential returns per unit of risk. Interface is currently generating about 0.12 per unit of risk. If you would invest  714.00  in Integral Ad Science on April 25, 2025 and sell it today you would earn a total of  124.00  from holding Integral Ad Science or generate 17.37% return on investment over 90 days.

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

Integral Ad Science  vs.  Interface

Integral Ad Science

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Integral unveiled solid returns over the last few months and may actually be approaching a breakup point.

Interface

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integral and Interface

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

The idea behind Integral Ad Science and Interface 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.