Correlation Between IMCO Industries and Almogim Holdings

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

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

Diversification Opportunities for IMCO Industries and Almogim Holdings

0.77

Correlation Coefficient

IMCO Industries  Almogim Holdings

Poor diversification

The 3 months correlation between IMCO and Almogim is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding IMCO Industries and Almogim Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almogim Holdings and IMCO Industries 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 IMCO Industries are associated (or correlated) with Almogim Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almogim Holdings has no effect on the direction of IMCO Industries i.e., IMCO Industries and Almogim Holdings go up and down completely randomly.

Pair Corralation between IMCO Industries and Almogim Holdings

Assuming the 90 days trading horizon IMCO Industries is expected to generate 1.99 times less return on investment than Almogim Holdings. In addition to that, IMCO Industries is 1.46 times more volatile than Almogim Holdings. It trades about 0.17 of its total potential returns per unit of risk. Almogim Holdings is currently generating about 0.48 per unit of volatility. If you would invest  84,350  in Almogim Holdings on September 27, 2024 and sell it today you would earn a total of  26,150  from holding Almogim Holdings or generate 31.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.22%
Values	Daily Returns

IMCO Industries  vs.  Almogim Holdings

IMCO Industries

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IMCO Industries are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IMCO Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Almogim Holdings

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Almogim Holdings are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Almogim Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IMCO Industries and Almogim Holdings

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

The idea behind IMCO Industries and Almogim Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.