Correlation Between Equinix and Inbar Group
Can any of the company-specific risk be diversified away by investing in both Equinix and Inbar Group 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 Equinix and Inbar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Inbar Group Finance, you can compare the effects of market volatilities on Equinix and Inbar Group 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 Equinix with a short position of Inbar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Inbar Group.
Diversification Opportunities for Equinix and Inbar Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Equinix and Inbar is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance and Equinix 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 Equinix are associated (or correlated) with Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of Equinix i.e., Equinix and Inbar Group go up and down completely randomly.
Pair Corralation between Equinix and Inbar Group
Given the investment horizon of 90 days Equinix is expected to generate 0.21 times more return on investment than Inbar Group. However, Equinix is 4.78 times less risky than Inbar Group. It trades about -0.14 of its potential returns per unit of risk. Inbar Group Finance is currently generating about -0.32 per unit of risk. If you would invest 79,252 in Equinix on January 25, 2024 and sell it today you would lose (3,718) from holding Equinix or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Equinix vs. Inbar Group Finance
Performance |
| Timeline |
| Equinix |
| Inbar Group Finance |
Equinix and Inbar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Inbar Group
The main advantage of trading using opposite Equinix and Inbar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Inbar Group 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 Inbar Group will offset losses from the drop in Inbar Group's long position.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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