Correlation Between Interactive Brokers and ETRADE Financial
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers and ETRADE Financial 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 ETRADE Financial 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 ETRADE Financial LLC, you can compare the effects of market volatilities on Interactive Brokers and ETRADE Financial 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 ETRADE Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and ETRADE Financial.
Diversification Opportunities for Interactive Brokers and ETRADE Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interactive and ETRADE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and ETRADE Financial LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRADE Financial LLC 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 ETRADE Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRADE Financial LLC has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and ETRADE Financial go up and down completely randomly.
Pair Corralation between Interactive Brokers and ETRADE Financial
If you would invest 10,995 in Interactive Brokers Group on January 21, 2024 and sell it today you would earn a total of 160.00 from holding Interactive Brokers Group or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Interactive Brokers Group vs. ETRADE Financial LLC
Performance |
| Timeline |
| Interactive Brokers |
| ETRADE Financial LLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Interactive Brokers and ETRADE Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and ETRADE Financial
The main advantage of trading using opposite Interactive Brokers and ETRADE Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers position performs unexpectedly, ETRADE Financial 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 ETRADE Financial will offset losses from the drop in ETRADE Financial's long position.| Interactive Brokers vs. JPMorgan Chase Co | Interactive Brokers vs. Wells Fargo | Interactive Brokers vs. Citigroup | Interactive Brokers vs. American Express |
| ETRADE Financial vs. Coty Inc | ETRADE Financial vs. Luxfer Holdings PLC | ETRADE Financial vs. Avient Corp | ETRADE Financial vs. RBC Bearings Incorporated |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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