Correlation Between Imricor Medical and Sensen Networks

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

By analyzing existing cross correlation between Imricor Medical Systems and Sensen Networks, you can compare the effects of market volatilities on Imricor Medical and Sensen Networks 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 Imricor Medical with a short position of Sensen Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imricor Medical and Sensen Networks.

Diversification Opportunities for Imricor Medical and Sensen Networks

-0.69

Correlation Coefficient

Imricor Medical  Sensen Networks

Excellent diversification

The 3 months correlation between Imricor and Sensen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Imricor Medical Systems and Sensen Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensen Networks and Imricor Medical 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 Imricor Medical Systems are associated (or correlated) with Sensen Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensen Networks has no effect on the direction of Imricor Medical i.e., Imricor Medical and Sensen Networks go up and down completely randomly.

Pair Corralation between Imricor Medical and Sensen Networks

Assuming the 90 days trading horizon Imricor Medical Systems is expected to generate 1.28 times more return on investment than Sensen Networks. However, Imricor Medical is 1.28 times more volatile than Sensen Networks. It trades about 0.19 of its potential returns per unit of risk. Sensen Networks is currently generating about -0.04 per unit of risk. If you would invest  60.00  in Imricor Medical Systems on September 25, 2024 and sell it today you would earn a total of  51.00  from holding Imricor Medical Systems or generate 85.0% return on investment over 90 days.

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

Imricor Medical Systems  vs.  Sensen Networks

Imricor Medical Systems

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Imricor Medical Systems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Imricor Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sensen Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensen Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Imricor Medical and Sensen Networks

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

The idea behind Imricor Medical Systems and Sensen Networks 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.