Correlation Between Bliss GVS and International Consolidated

Can any of the company-specific risk be diversified away by investing in both Bliss GVS and International Consolidated 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 Bliss GVS and International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bliss GVS Pharma and International Consolidated Airlines, you can compare the effects of market volatilities on Bliss GVS and International Consolidated 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 Bliss GVS with a short position of International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bliss GVS and International Consolidated.

Diversification Opportunities for Bliss GVS and International Consolidated

-0.17

Correlation Coefficient

Bliss GVS  International Consolidated

Good diversification

The 3 months correlation between Bliss and International is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bliss GVS Pharma and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Bliss GVS 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 Bliss GVS Pharma are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Bliss GVS i.e., Bliss GVS and International Consolidated go up and down completely randomly.

Pair Corralation between Bliss GVS and International Consolidated

Assuming the 90 days trading horizon Bliss GVS is expected to generate 1.58 times less return on investment than International Consolidated. But when comparing it to its historical volatility, Bliss GVS Pharma is 1.46 times less risky than International Consolidated. It trades about 0.06 of its potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  213.00  in International Consolidated Airlines on February 6, 2024 and sell it today you would earn a total of  8.00  from holding International Consolidated Airlines or generate 3.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Bliss GVS Pharma  vs.  International Consolidated Air

Bliss GVS Pharma

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bliss GVS Pharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Bliss GVS is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

International Consolidated

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, International Consolidated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bliss GVS and International Consolidated

The main advantage of trading using opposite Bliss GVS and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bliss GVS position performs unexpectedly, International Consolidated 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 Consolidated will offset losses from the drop in International Consolidated's long position.

The idea behind Bliss GVS Pharma and International Consolidated Airlines 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.