Correlation Between International Business and Airgain

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

Diversification Opportunities for International Business and Airgain

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between International and Airgain is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain and International Business 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 International Business Machines are associated (or correlated) with Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of International Business i.e., International Business and Airgain go up and down completely randomly.

Pair Corralation between International Business and Airgain

Considering the 90-day investment horizon International Business Machines is expected to under-perform the Airgain. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines is 2.36 times less risky than Airgain. The stock trades about -0.19 of its potential returns per unit of risk. The Airgain is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  843.00  in Airgain on May 11, 2022 and sell it today you would lose (27.00)  from holding Airgain or give up 3.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

International Business Machine  vs.  Airgain

 Performance (%) 
       Timeline  
International Business 
International Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady fundamental drivers, International Business is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

International Price Channel

Airgain 
Airgain Performance
0 of 100
Over the last 90 days Airgain 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 basic indicators remain rather sound which may send shares a bit higher in September 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Airgain Price Channel

International Business and Airgain Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with International Business and Airgain

The main advantage of trading using opposite International Business and Airgain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Airgain 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 Airgain will offset losses from the drop in Airgain's long position.
The idea behind International Business Machines and Airgain 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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