Correlation Between BioRem and Imaflex
Can any of the company-specific risk be diversified away by investing in both BioRem and Imaflex 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 BioRem and Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioRem Inc and Imaflex, you can compare the effects of market volatilities on BioRem and Imaflex 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 BioRem with a short position of Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioRem and Imaflex.
Diversification Opportunities for BioRem and Imaflex
Good diversification
The 3 months correlation between BioRem and Imaflex is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BioRem Inc and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and BioRem 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 BioRem Inc are associated (or correlated) with Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of BioRem i.e., BioRem and Imaflex go up and down completely randomly.
Pair Corralation between BioRem and Imaflex
Assuming the 90 days horizon BioRem Inc is expected to generate 1.62 times more return on investment than Imaflex. However, BioRem is 1.62 times more volatile than Imaflex. It trades about 0.22 of its potential returns per unit of risk. Imaflex is currently generating about -0.09 per unit of risk. If you would invest 245.00 in BioRem Inc on September 1, 2024 and sell it today you would earn a total of 55.00 from holding BioRem Inc or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioRem Inc vs. Imaflex
Performance |
| Timeline |
| BioRem Inc |
| Imaflex |
BioRem and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioRem and Imaflex
The main advantage of trading using opposite BioRem and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioRem position performs unexpectedly, Imaflex 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 Imaflex will offset losses from the drop in Imaflex's long position.| BioRem vs. Thermal Energy International | BioRem vs. BluMetric Environmental | BioRem vs. Vitreous Glass | BioRem vs. CHAR Technologies |
| Imaflex vs. AirIQ Inc | Imaflex vs. NamSys Inc | Imaflex vs. Supremex | Imaflex vs. Atlas Engineered Products |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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