Correlation Between American Shipping and International Business

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Shipping 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 American Shipping and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shipping and International Business Machines, you can compare the effects of market volatilities on American Shipping 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 American Shipping with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shipping and International Business.

Diversification Opportunities for American Shipping and International Business

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between American and International is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Shipping and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and American Shipping 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 American Shipping 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 American Shipping i.e., American Shipping and International Business go up and down completely randomly.

Pair Corralation between American Shipping and International Business

Assuming the 90 days trading horizon American Shipping is expected to generate 1.31 times more return on investment than International Business. However, American Shipping is 1.31 times more volatile than International Business Machines. It trades about 0.13 of its potential returns per unit of risk. International Business Machines is currently generating about 0.11 per unit of risk. If you would invest  2,622  in American Shipping on December 29, 2023 and sell it today you would earn a total of  138.00  from holding American Shipping or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

American Shipping  vs.  International Business Machine

 Performance 
       Timeline  
American Shipping 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in American Shipping are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, American Shipping is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
International Business 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, International Business displayed solid returns over the last few months and may actually be approaching a breakup point.

American Shipping and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Shipping and International Business

The main advantage of trading using opposite American Shipping and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shipping 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 American Shipping 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.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Money Managers
Screen money managers from public funds and ETFs managed around the world
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Commodity Directory
Find actively traded commodities issued by global exchanges
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities