Correlation Between Intuit and US Global
Can any of the company-specific risk be diversified away by investing in both Intuit and US 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 Intuit and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuit Inc and US Global Sea, you can compare the effects of market volatilities on Intuit and US 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 Intuit with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuit and US Global.
Diversification Opportunities for Intuit and US Global
Good diversification
The 3 months correlation between Intuit and SEA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and Intuit 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 Intuit Inc are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of Intuit i.e., Intuit and US Global go up and down completely randomly.
Pair Corralation between Intuit and US Global
Given the investment horizon of 90 days Intuit Inc is expected to under-perform the US Global. In addition to that, Intuit is 1.25 times more volatile than US Global Sea. It trades about -0.19 of its total potential returns per unit of risk. US Global Sea is currently generating about 0.17 per unit of volatility. If you would invest 1,490 in US Global Sea on January 24, 2024 and sell it today you would earn a total of 46.00 from holding US Global Sea or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuit Inc vs. US Global Sea
Performance |
| Timeline |
| Intuit Inc |
| US Global Sea |
Intuit and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuit and US Global
The main advantage of trading using opposite Intuit and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuit position performs unexpectedly, US 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 US Global will offset losses from the drop in US Global's long position.The idea behind Intuit Inc and US Global Sea 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.| US Global vs. Materials Select Sector | US Global vs. Consumer Discretionary Select | US Global vs. Consumer Staples Select | US Global vs. Health Care Select |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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