Correlation Between International Business and Duck Creek

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Can any of the company-specific risk be diversified away by investing in both International Business and Duck Creek 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 Duck Creek 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 Duck Creek Technologies, you can compare the effects of market volatilities on International Business and Duck Creek 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 Duck Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Duck Creek.

Diversification Opportunities for International Business and Duck Creek

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between International and Duck Creek is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Duck Creek Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duck Creek Technologies 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 Duck Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duck Creek Technologies has no effect on the direction of International Business i.e., International Business and Duck Creek go up and down completely randomly.

Pair Corralation between International Business and Duck Creek

Considering the 90-day investment horizon International Business is expected to generate 1.14 times less return on investment than Duck Creek. But when comparing it to its historical volatility, International Business Machines is 3.35 times less risky than Duck Creek. It trades about 0.4 of its potential returns per unit of risk. Duck Creek Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,047  in Duck Creek Technologies on September 6, 2022 and sell it today you would earn a total of  88.00  from holding Duck Creek Technologies or generate 8.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

International Business Machine  vs.  Duck Creek Technologies

 Performance (%) 
       Timeline  
International Business 
International Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental drivers, International Business revealed solid returns over the last few months and may actually be approaching a breakup point.

International Price Channel

Duck Creek Technologies 
Duck Creek Performance
0 of 100
Over the last 90 days Duck Creek Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Duck Creek is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Duck Creek Price Channel

International Business and Duck Creek Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with International Business and Duck Creek

The main advantage of trading using opposite International Business and Duck Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Duck Creek 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 Duck Creek will offset losses from the drop in Duck Creek's long position.
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The idea behind International Business Machines and Duck Creek Technologies 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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