Correlation Between Frasers Property and International Business

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Can any of the company-specific risk be diversified away by investing in both Frasers Property 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 Frasers Property and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frasers Property Limited and International Business Machines, you can compare the effects of market volatilities on Frasers Property 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 Frasers Property with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frasers Property and International Business.

Diversification Opportunities for Frasers Property and International Business

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Frasers and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frasers Property Limited and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Frasers Property 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 Frasers Property Limited 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 Frasers Property i.e., Frasers Property and International Business go up and down completely randomly.

Pair Corralation between Frasers Property and International Business

If you would invest  11,504  in International Business Machines on December 30, 2023 and sell it today you would earn a total of  7,592  from holding International Business Machines or generate 65.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Frasers Property Limited  vs.  International Business Machine

 Performance 
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Frasers Property 

Risk-Adjusted Performance

0 of 100

 
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High
Good
Over the last 90 days Frasers Property Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Frasers Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
International Business 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental drivers, International Business displayed solid returns over the last few months and may actually be approaching a breakup point.

Frasers Property and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Frasers Property and International Business

The main advantage of trading using opposite Frasers Property and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frasers Property 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.
The idea behind Frasers Property Limited and International Business Machines 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 Stocks Directory module to find actively traded stocks across global markets.

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