Correlation Between IBEX and Data Storage

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

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

Diversification Opportunities for IBEX and Data Storage

-0.08

Correlation Coefficient

IBEX  Data Storage

Good diversification

The 3 months correlation between IBEX and Data is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding IBEX and Data Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage and IBEX 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 IBEX are associated (or correlated) with Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage has no effect on the direction of IBEX i.e., IBEX and Data Storage go up and down completely randomly.

Pair Corralation between IBEX and Data Storage

Given the investment horizon of 90 days IBEX is expected to generate 1.4 times more return on investment than Data Storage. However, IBEX is 1.4 times more volatile than Data Storage. It trades about 0.2 of its potential returns per unit of risk. Data Storage is currently generating about -0.32 per unit of risk. If you would invest  2,911  in IBEX on June 17, 2025 and sell it today you would earn a total of  974.00  from holding IBEX or generate 33.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

IBEX  vs.  Data Storage

IBEX

Risk-Adjusted Performance

Fair

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

Data Storage

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Data Storage are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Data Storage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IBEX and Data Storage

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

The idea behind IBEX and Data Storage 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.