Correlation Between IMAC Holdings and Barloworld

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Can any of the company-specific risk be diversified away by investing in both IMAC Holdings and Barloworld 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 IMAC Holdings and Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMAC Holdings and Barloworld Ltd ADR, you can compare the effects of market volatilities on IMAC Holdings and Barloworld 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 IMAC Holdings with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAC Holdings and Barloworld.

Diversification Opportunities for IMAC Holdings and Barloworld

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IMAC and Barloworld is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IMAC Holdings and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR and IMAC Holdings 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 IMAC Holdings are associated (or correlated) with Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of IMAC Holdings i.e., IMAC Holdings and Barloworld go up and down completely randomly.

Pair Corralation between IMAC Holdings and Barloworld

Given the investment horizon of 90 days IMAC Holdings is expected to under-perform the Barloworld. In addition to that, IMAC Holdings is 1.76 times more volatile than Barloworld Ltd ADR. It trades about -0.1 of its total potential returns per unit of risk. Barloworld Ltd ADR is currently generating about -0.01 per unit of volatility. If you would invest  465.00  in Barloworld Ltd ADR on August 28, 2024 and sell it today you would lose (42.00) from holding Barloworld Ltd ADR or give up 9.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy97.62%
ValuesDaily Returns

IMAC Holdings  vs.  Barloworld Ltd ADR

 Performance 
       Timeline  
IMAC Holdings 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days IMAC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Barloworld ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Barloworld Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Barloworld is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

IMAC Holdings and Barloworld Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IMAC Holdings and Barloworld

The main advantage of trading using opposite IMAC Holdings and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMAC Holdings position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.
The idea behind IMAC Holdings and Barloworld Ltd ADR 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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