Correlation Between Twitter and Ideanomics

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

Diversification Opportunities for Twitter and Ideanomics

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Twitter and Ideanomics is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics and Twitter 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 Twitter are associated (or correlated) with Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Twitter i.e., Twitter and Ideanomics go up and down completely randomly.

Pair Corralation between Twitter and Ideanomics

Given the investment horizon of 90 days Twitter is expected to generate 0.43 times more return on investment than Ideanomics. However, Twitter is 2.33 times less risky than Ideanomics. It trades about 0.25 of its potential returns per unit of risk. Ideanomics is currently generating about -0.85 per unit of risk. If you would invest  3,865  in Twitter on July 6, 2022 and sell it today you would earn a total of  389.00  from holding Twitter or generate 10.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Twitter  vs.  Ideanomics

 Performance (%) 
       Timeline  
Twitter 
Twitter Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Twitter are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Twitter reported solid returns over the last few months and may actually be approaching a breakup point.

Twitter Price Channel

Ideanomics 
Ideanomics Performance
0 of 100
Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Ideanomics Price Channel

Twitter and Ideanomics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Twitter and Ideanomics

The main advantage of trading using opposite Twitter and Ideanomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Ideanomics 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 Ideanomics will offset losses from the drop in Ideanomics' long position.
Twitter vs. Tencent Holdings
The idea behind Twitter and Ideanomics 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.
Ideanomics vs. Amazon Inc
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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