Correlation Between Impax Asset and Coor Service

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

By analyzing existing cross correlation between Impax Asset Management and Coor Service Management, you can compare the effects of market volatilities on Impax Asset and Coor Service 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 Impax Asset with a short position of Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Coor Service.

Diversification Opportunities for Impax Asset and Coor Service

0.78

Correlation Coefficient

Impax Asset  Coor Service

Poor diversification

The 3 months correlation between Impax and Coor is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management and Impax Asset 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 Impax Asset Management are associated (or correlated) with Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of Impax Asset i.e., Impax Asset and Coor Service go up and down completely randomly.

Pair Corralation between Impax Asset and Coor Service

Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Coor Service. In addition to that, Impax Asset is 1.78 times more volatile than Coor Service Management. It trades about -0.16 of its total potential returns per unit of risk. Coor Service Management is currently generating about -0.21 per unit of volatility. If you would invest  4,460  in Coor Service Management on September 24, 2024 and sell it today you would lose (1,137) from holding Coor Service Management or give up 25.49% of portfolio value over 90 days.

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

Impax Asset Management  vs.  Coor Service Management

Impax Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impax Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Impax Asset and Coor Service

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

The idea behind Impax Asset Management and Coor Service Management 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..