Correlation Between Irobot Corp and Altisource Asset

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

Diversification Opportunities for Irobot Corp and Altisource Asset

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Irobot and Altisource is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Irobot Corp and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man and Irobot Corp 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 Irobot Corp are associated (or correlated) with Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of Irobot Corp i.e., Irobot Corp and Altisource Asset go up and down completely randomly.

Pair Corralation between Irobot Corp and Altisource Asset

Given the investment horizon of 90 days Irobot Corp is expected to generate 0.08 times more return on investment than Altisource Asset. However, Irobot Corp is 11.83 times less risky than Altisource Asset. It trades about -0.27 of its potential returns per unit of risk. Altisource Asset Management is currently generating about -0.2 per unit of risk. If you would invest  5,865  in Irobot Corp on June 29, 2022 and sell it today you would lose (114.00)  from holding Irobot Corp or give up 1.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Irobot Corp  vs.  Altisource Asset Management

 Performance (%) 
       Timeline  
Irobot Corp 
Irobot Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Irobot Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental drivers, Irobot Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Irobot Price Channel

Altisource Asset Man 
Altisource Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Altisource Asset Management are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Altisource Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Altisource Price Channel

Irobot Corp and Altisource Asset Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Irobot Corp and Altisource Asset

The main advantage of trading using opposite Irobot Corp and Altisource Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Irobot Corp position performs unexpectedly, Altisource Asset 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 Altisource Asset will offset losses from the drop in Altisource Asset's long position.
Irobot Corp vs. Clearwater Paper Corp
The idea behind Irobot Corp and Altisource Asset Management 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.
Altisource Asset vs. Kibush Capital Corp
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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