Correlation Between Impinj and Deutsche Lufthansa
Can any of the company-specific risk be diversified away by investing in both Impinj and Deutsche Lufthansa 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 Impinj and Deutsche Lufthansa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impinj Inc and Deutsche Lufthansa AG, you can compare the effects of market volatilities on Impinj and Deutsche Lufthansa 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 Impinj with a short position of Deutsche Lufthansa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impinj and Deutsche Lufthansa.
Diversification Opportunities for Impinj and Deutsche Lufthansa
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impinj and Deutsche is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Deutsche Lufthansa AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Lufthansa and Impinj 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 Impinj Inc are associated (or correlated) with Deutsche Lufthansa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Lufthansa has no effect on the direction of Impinj i.e., Impinj and Deutsche Lufthansa go up and down completely randomly.
Pair Corralation between Impinj and Deutsche Lufthansa
Assuming the 90 days trading horizon Impinj Inc is expected to generate 1.42 times more return on investment than Deutsche Lufthansa. However, Impinj is 1.42 times more volatile than Deutsche Lufthansa AG. It trades about -0.01 of its potential returns per unit of risk. Deutsche Lufthansa AG is currently generating about -0.25 per unit of risk. If you would invest 18,685 in Impinj Inc on August 29, 2024 and sell it today you would lose (210.00) from holding Impinj Inc or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impinj Inc vs. Deutsche Lufthansa AG
Performance |
| Timeline |
| Impinj Inc |
| Deutsche Lufthansa |
Impinj and Deutsche Lufthansa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impinj and Deutsche Lufthansa
The main advantage of trading using opposite Impinj and Deutsche Lufthansa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj position performs unexpectedly, Deutsche Lufthansa 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 Deutsche Lufthansa will offset losses from the drop in Deutsche Lufthansa's long position.| Impinj vs. FARO Technologies | Impinj vs. TOWNSQUARE MEDIA INC | Impinj vs. Hollywood Bowl Group | Impinj vs. Sunny Optical Technology |
| Deutsche Lufthansa vs. BOS BETTER ONLINE | Deutsche Lufthansa vs. Canadian Utilities Limited | Deutsche Lufthansa vs. Ultra Clean Holdings | Deutsche Lufthansa vs. Eidesvik Offshore ASA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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