Correlation Between Prosafe SE and Impinj

Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Impinj 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 Prosafe SE and Impinj into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Prosafe SE and Impinj

-0.18

Correlation Coefficient

Prosafe SE  Impinj

Good diversification

The 3 months correlation between Prosafe and Impinj is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and Prosafe SE 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 Prosafe SE are associated (or correlated) with Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of Prosafe SE i.e., Prosafe SE and Impinj go up and down completely randomly.

Pair Corralation between Prosafe SE and Impinj

Assuming the 90 days horizon Prosafe SE is expected to under-perform the Impinj. In addition to that, Prosafe SE is 1.8 times more volatile than Impinj Inc. It trades about -0.43 of its total potential returns per unit of risk. Impinj Inc is currently generating about 0.12 per unit of volatility. If you would invest  14,835  in Impinj Inc on August 30, 2024 and sell it today you would earn a total of  3,540  from holding Impinj Inc or generate 23.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Prosafe SE  vs.  Impinj Inc

Prosafe SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosafe SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Impinj Inc

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impinj Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Impinj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prosafe SE and Impinj

The main advantage of trading using opposite Prosafe SE and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.

The idea behind Prosafe SE and Impinj Inc 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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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.