Correlation Between Interactive Brokers and Associated Capital
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers and Associated Capital 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 Interactive Brokers and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interactive Brokers Group and Associated Capital Group, you can compare the effects of market volatilities on Interactive Brokers and Associated Capital 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 Interactive Brokers with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Associated Capital.
Diversification Opportunities for Interactive Brokers and Associated Capital
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interactive and Associated is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Interactive Brokers 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 Interactive Brokers Group are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and Associated Capital go up and down completely randomly.
Pair Corralation between Interactive Brokers and Associated Capital
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 0.73 times more return on investment than Associated Capital. However, Interactive Brokers Group is 1.37 times less risky than Associated Capital. It trades about 0.21 of its potential returns per unit of risk. Associated Capital Group is currently generating about -0.08 per unit of risk. If you would invest 10,699 in Interactive Brokers Group on December 29, 2023 and sell it today you would earn a total of 444.00 from holding Interactive Brokers Group or generate 4.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Interactive Brokers Group vs. Associated Capital Group
Performance |
Timeline |
Interactive Brokers |
Associated Capital |
Interactive Brokers and Associated Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Interactive Brokers and Associated Capital
The main advantage of trading using opposite Interactive Brokers and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.Interactive Brokers vs. Visa Class A | Interactive Brokers vs. Diamond Hill Investment | Interactive Brokers vs. Nocturne Acquisition Corp | Interactive Brokers vs. Mountain I Acquisition |
Associated Capital vs. United Microelectronics | Associated Capital vs. United Rentals | Associated Capital vs. Valens | Associated Capital vs. Alta Equipment Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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