Correlation Between Analyst IMS and Export Inv

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

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

Diversification Opportunities for Analyst IMS and Export Inv

0.9

Correlation Coefficient

Analyst IMS  Export Inv

Almost no diversification

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

Pair Corralation between Analyst IMS and Export Inv

Assuming the 90 days trading horizon Analyst IMS is expected to generate 1.27 times less return on investment than Export Inv. But when comparing it to its historical volatility, Analyst IMS Investment is 3.77 times less risky than Export Inv. It trades about 0.75 of its potential returns per unit of risk. Export Inv is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  544,300  in Export Inv on September 24, 2024 and sell it today you would earn a total of  130,700  from holding Export Inv or generate 24.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Analyst IMS Investment  vs.  Export Inv

Analyst IMS Investment

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Analyst IMS Investment are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Analyst IMS sustained solid returns over the last few months and may actually be approaching a breakup point.

Export Inv

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Export Inv are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Export Inv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analyst IMS and Export Inv

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

The idea behind Analyst IMS Investment and Export Inv 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.