Correlation Between IHS Holding and IDT
Can any of the company-specific risk be diversified away by investing in both IHS Holding and IDT 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 IHS Holding and IDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHS Holding and IDT Corporation, you can compare the effects of market volatilities on IHS Holding and IDT 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 IHS Holding with a short position of IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHS Holding and IDT.
Diversification Opportunities for IHS Holding and IDT
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IHS and IDT is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding IHS Holding and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation and IHS Holding 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 IHS Holding are associated (or correlated) with IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of IHS Holding i.e., IHS Holding and IDT go up and down completely randomly.
Pair Corralation between IHS Holding and IDT
Considering the 90-day investment horizon IHS Holding is expected to generate 2.25 times less return on investment than IDT. In addition to that, IHS Holding is 1.37 times more volatile than IDT Corporation. It trades about 0.05 of its total potential returns per unit of risk. IDT Corporation is currently generating about 0.16 per unit of volatility. If you would invest 5,218 in IDT Corporation on March 23, 2025 and sell it today you would earn a total of 1,390 from holding IDT Corporation or generate 26.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHS Holding vs. IDT Corp.
Performance |
| Timeline |
| IHS Holding |
| IDT Corporation |
IHS Holding and IDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHS Holding and IDT
The main advantage of trading using opposite IHS Holding and IDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHS Holding position performs unexpectedly, IDT 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 IDT will offset losses from the drop in IDT's long position.| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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