Correlation Between British American and Impinj
Can any of the company-specific risk be diversified away by investing in both British American and Impinj 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 British American and Impinj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Impinj Inc, you can compare the effects of market volatilities on British American and Impinj 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 British American with a short position of Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Impinj.
Diversification Opportunities for British American and Impinj
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Impinj is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and British American 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 British American Tobacco are associated (or correlated) with Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of British American i.e., British American and Impinj go up and down completely randomly.
Pair Corralation between British American and Impinj
Assuming the 90 days trading horizon British American is expected to generate 6.18 times less return on investment than Impinj. But when comparing it to its historical volatility, British American Tobacco is 3.39 times less risky than Impinj. It trades about 0.02 of its potential returns per unit of risk. Impinj Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,865 in Impinj Inc on September 12, 2024 and sell it today you would earn a total of 3,860 from holding Impinj Inc or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Impinj Inc
Performance |
| Timeline |
| British American Tobacco |
| Impinj Inc |
British American and Impinj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Impinj
The main advantage of trading using opposite British American and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.| British American vs. British American Tobacco | British American vs. Japan Tobacco | British American vs. JAPAN TOBACCO UNSPADR12 |
| Impinj vs. GigaMedia | Impinj vs. TSOGO SUN GAMING | Impinj vs. PKSHA TECHNOLOGY INC | Impinj vs. British American Tobacco |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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