Correlation Between ImagineAR and Pruksa Holding

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

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

Diversification Opportunities for ImagineAR and Pruksa Holding

-0.44

Correlation Coefficient

ImagineAR  Pruksa Holding

Very good diversification

The 3 months correlation between ImagineAR and Pruksa is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ImagineAR and Pruksa Holding Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pruksa Holding Public and ImagineAR 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 ImagineAR are associated (or correlated) with Pruksa Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pruksa Holding Public has no effect on the direction of ImagineAR i.e., ImagineAR and Pruksa Holding go up and down completely randomly.

Pair Corralation between ImagineAR and Pruksa Holding

Assuming the 90 days trading horizon ImagineAR is expected to generate 4.38 times more return on investment than Pruksa Holding. However, ImagineAR is 4.38 times more volatile than Pruksa Holding Public. It trades about 0.06 of its potential returns per unit of risk. Pruksa Holding Public is currently generating about -0.1 per unit of risk. If you would invest  3.80  in ImagineAR on September 23, 2024 and sell it today you would earn a total of  0.50  from holding ImagineAR or generate 13.16% return on investment over 90 days.

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

ImagineAR  vs.  Pruksa Holding Public

ImagineAR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ImagineAR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ImagineAR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pruksa Holding Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pruksa Holding Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ImagineAR and Pruksa Holding

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

The idea behind ImagineAR and Pruksa Holding Public 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.