Correlation Between IACInterActiveCorp and Facebook

By analyzing existing cross correlation between IACInterActiveCorp and Facebook you can compare the effects of market volatilities on IACInterActiveCorp and Facebook 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 IACInterActiveCorp with a short position of Facebook. Check out your portfolio center. Please also check ongoing floating volatility patterns of IACInterActiveCorp and Facebook.

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Can any of the company-specific risk be diversified away by investing in both IACInterActiveCorp and Facebook at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing IACInterActiveCorp and Facebook into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for IACInterActiveCorp and Facebook

0.95
Correlation
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Almost no diversification

The 3 months correlation between IACInterActiveCorp and Facebook is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding IACInterActiveCorp and Facebook Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Facebook and IACInterActiveCorp 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 IACInterActiveCorp are associated (or correlated) with Facebook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facebook has no effect on the direction of IACInterActiveCorp i.e. IACInterActiveCorp and Facebook go up and down completely randomly.

Pair Corralation between IACInterActiveCorp and Facebook

Considering 30-days investment horizon, IACInterActiveCorp is expected to generate 1.21 times more return on investment than Facebook. However, IACInterActiveCorp is 1.21 times more volatile than Facebook. It trades about 0.16 of its potential returns per unit of risk. Facebook is currently generating about 0.14 per unit of risk. If you would invest  18,917  in IACInterActiveCorp on May 7, 2020 and sell it today you would earn a total of  9,556  from holding IACInterActiveCorp or generate 50.52% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

IACInterActiveCorp  vs.  Facebook Inc

 Performance (%) 
      Timeline 
IACInterActiveCorp 
1010

IACInterActiveCorp Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in IACInterActiveCorp are ranked lower than 10 (%) of all global equities and portfolios over the last 30 days. Despite somewhat weak basic indicators, IACInterActiveCorp sustained solid returns over the last few months and may actually be approaching a breakup point.
Facebook 
99

Facebook Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Facebook are ranked lower than 9 (%) of all global equities and portfolios over the last 30 days. Despite somewhat unfluctuating basic indicators, Facebook sustained solid returns over the last few months and may actually be approaching a breakup point.

IACInterActiveCorp and Facebook Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of macroaxis ideas.


 
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