Correlation Between International Business and Caduceus Software

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

By analyzing existing cross correlation between International Business Machines and Caduceus Software Systems, you can compare the effects of market volatilities on International Business and Caduceus Software 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 International Business with a short position of Caduceus Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Caduceus Software.

Diversification Opportunities for International Business and Caduceus Software

-0.77

Correlation Coefficient

International Business  Caduceus Software

Pay attention - limited upside

The 3 months correlation between International and Caduceus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Caduceus Software Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caduceus Software Systems and International Business 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 International Business Machines are associated (or correlated) with Caduceus Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caduceus Software Systems has no effect on the direction of International Business i.e., International Business and Caduceus Software go up and down completely randomly.

Pair Corralation between International Business and Caduceus Software

Considering the 90-day investment horizon International Business is expected to generate 58.7 times less return on investment than Caduceus Software. But when comparing it to its historical volatility, International Business Machines is 13.9 times less risky than Caduceus Software. It trades about 0.02 of its potential returns per unit of risk. Caduceus Software Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.65  in Caduceus Software Systems on May 4, 2025 and sell it today you would lose (0.15) from holding Caduceus Software Systems or give up 23.08% of portfolio value over 90 days.

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

International Business Machine  vs.  Caduceus Software Systems

International Business

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, International Business is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Caduceus Software Systems

Risk-Adjusted Performance

Modest

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

Pair Trading with International Business and Caduceus Software

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

The idea behind International Business Machines and Caduceus Software Systems 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.