Correlation Between SportsHero and Imricor Medical

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

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

Diversification Opportunities for SportsHero and Imricor Medical

0.85

Correlation Coefficient

SportsHero  Imricor Medical

Very poor diversification

The 3 months correlation between SportsHero and Imricor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SportsHero and Imricor Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imricor Medical Systems and SportsHero 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 SportsHero are associated (or correlated) with Imricor Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imricor Medical Systems has no effect on the direction of SportsHero i.e., SportsHero and Imricor Medical go up and down completely randomly.

Pair Corralation between SportsHero and Imricor Medical

Assuming the 90 days trading horizon SportsHero is expected to generate 1.17 times more return on investment than Imricor Medical. However, SportsHero is 1.17 times more volatile than Imricor Medical Systems. It trades about 0.27 of its potential returns per unit of risk. Imricor Medical Systems is currently generating about 0.23 per unit of risk. If you would invest  0.70  in SportsHero on September 3, 2024 and sell it today you would earn a total of  1.30  from holding SportsHero or generate 185.71% return on investment over 90 days.

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

SportsHero  vs.  Imricor Medical Systems

SportsHero

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SportsHero are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SportsHero unveiled solid returns over the last few months and may actually be approaching a breakup point.

Imricor Medical Systems

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Imricor Medical Systems are ranked lower than 17 (%) 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.

Pair Trading with SportsHero and Imricor Medical

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

The idea behind SportsHero and Imricor Medical Systems 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.