Correlation Between Triumph and International Business
Can any of the company-specific risk be diversified away by investing in both Triumph and International Business 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 Triumph and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triumph Group and International Business Machines, you can compare the effects of market volatilities on Triumph and International Business 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 Triumph with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph and International Business.
Diversification Opportunities for Triumph and International Business
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Triumph and International is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Triumph 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 Triumph Group are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Triumph i.e., Triumph and International Business go up and down completely randomly.
Pair Corralation between Triumph and International Business
Considering the 90-day investment horizon Triumph Group is expected to under-perform the International Business. In addition to that, Triumph is 2.06 times more volatile than International Business Machines. It trades about -0.16 of its total potential returns per unit of risk. International Business Machines is currently generating about -0.12 per unit of volatility. If you would invest 18,879 in International Business Machines on January 25, 2024 and sell it today you would lose (469.00) from holding International Business Machines or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triumph Group vs. International Business Machine
Performance |
| Timeline |
| Triumph Group |
| International Business |
Triumph and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph and International Business
The main advantage of trading using opposite Triumph and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Triumph vs. HEICO | Triumph vs. L3Harris Technologies | Triumph vs. Huntington Ingalls Industries | Triumph vs. Lockheed Martin |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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