Correlation Between International Business and Defiance Daily

Can any of the company-specific risk be diversified away by investing in both International Business and Defiance Daily 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 Defiance Daily 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 Defiance Daily Target, you can compare the effects of market volatilities on International Business and Defiance Daily 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 Defiance Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Defiance Daily.

Diversification Opportunities for International Business and Defiance Daily

0.38

Correlation Coefficient

International Business  Defiance Daily

Weak diversification

The 3 months correlation between International and Defiance is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Defiance Daily Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Daily Target 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 Defiance Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Daily Target has no effect on the direction of International Business i.e., International Business and Defiance Daily go up and down completely randomly.

Pair Corralation between International Business and Defiance Daily

Considering the 90-day investment horizon International Business Machines is expected to generate 0.19 times more return on investment than Defiance Daily. However, International Business Machines is 5.3 times less risky than Defiance Daily. It trades about -0.31 of its potential returns per unit of risk. Defiance Daily Target is currently generating about -0.07 per unit of risk. If you would invest  28,765  in International Business Machines on May 3, 2025 and sell it today you would lose (3,450) from holding International Business Machines or give up 11.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

International Business Machine  vs.  Defiance Daily Target

International Business

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 2 (%) 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.

Defiance Daily Target

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Daily Target are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Defiance Daily showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Business and Defiance Daily

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

The idea behind International Business Machines and Defiance Daily Target 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.