Correlation Between Cochlear and Imugene
Can any of the company-specific risk be diversified away by investing in both Cochlear and Imugene 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 Cochlear and Imugene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cochlear and Imugene, you can compare the effects of market volatilities on Cochlear and Imugene 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 Cochlear with a short position of Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cochlear and Imugene.
Diversification Opportunities for Cochlear and Imugene
Very good diversification
The 3 months correlation between Cochlear and Imugene is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cochlear and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene and Cochlear 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 Cochlear are associated (or correlated) with Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Cochlear i.e., Cochlear and Imugene go up and down completely randomly.
Pair Corralation between Cochlear and Imugene
Assuming the 90 days trading horizon Cochlear is expected to generate 0.27 times more return on investment than Imugene. However, Cochlear is 3.73 times less risky than Imugene. It trades about 0.07 of its potential returns per unit of risk. Imugene is currently generating about -0.02 per unit of risk. If you would invest 20,418 in Cochlear on November 2, 2024 and sell it today you would earn a total of 11,482 from holding Cochlear or generate 56.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cochlear vs. Imugene
Performance |
| Timeline |
| Cochlear |
| Imugene |
Cochlear and Imugene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cochlear and Imugene
The main advantage of trading using opposite Cochlear and Imugene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cochlear position performs unexpectedly, Imugene 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 Imugene will offset losses from the drop in Imugene's long position.| Cochlear vs. Flagship Investments | Cochlear vs. Bluescope Steel | Cochlear vs. BKI Investment | Cochlear vs. Navigator Global Investments |
| Imugene vs. Hutchison Telecommunications | Imugene vs. Medical Developments International | Imugene vs. Aurelia Metals | Imugene vs. Actinogen Medical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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