Correlation Between IBU Tec and Adtalem Global

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

By analyzing existing cross correlation between IBU tec advanced materials and Adtalem Global Education, you can compare the effects of market volatilities on IBU Tec and Adtalem Global 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 IBU Tec with a short position of Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBU Tec and Adtalem Global.

Diversification Opportunities for IBU Tec and Adtalem Global

-0.41

Correlation Coefficient

IBU Tec  Adtalem Global

Very good diversification

The 3 months correlation between IBU and Adtalem is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding IBU tec advanced materials and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education and IBU Tec 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 IBU tec advanced materials are associated (or correlated) with Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of IBU Tec i.e., IBU Tec and Adtalem Global go up and down completely randomly.

Pair Corralation between IBU Tec and Adtalem Global

Assuming the 90 days trading horizon IBU tec advanced materials is expected to generate 1.41 times more return on investment than Adtalem Global. However, IBU Tec is 1.41 times more volatile than Adtalem Global Education. It trades about 0.19 of its potential returns per unit of risk. Adtalem Global Education is currently generating about 0.01 per unit of risk. If you would invest  562.00  in IBU tec advanced materials on May 5, 2025 and sell it today you would earn a total of  350.00  from holding IBU tec advanced materials or generate 62.28% return on investment over 90 days.

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

IBU tec advanced materials  vs.  Adtalem Global Education

IBU tec advanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IBU tec advanced materials are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IBU Tec unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adtalem Global Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adtalem Global Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Adtalem Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IBU Tec and Adtalem Global

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

The idea behind IBU tec advanced materials and Adtalem Global Education 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.