Correlation Between IMAGIN MEDICAL and OBSERVE MEDICAL
Can any of the company-specific risk be diversified away by investing in both IMAGIN MEDICAL and OBSERVE MEDICAL 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 IMAGIN MEDICAL and OBSERVE MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMAGIN MEDICAL INC and OBSERVE MEDICAL ASA, you can compare the effects of market volatilities on IMAGIN MEDICAL and OBSERVE MEDICAL 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 IMAGIN MEDICAL with a short position of OBSERVE MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAGIN MEDICAL and OBSERVE MEDICAL.
Diversification Opportunities for IMAGIN MEDICAL and OBSERVE MEDICAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IMAGIN and OBSERVE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IMAGIN MEDICAL INC and OBSERVE MEDICAL ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBSERVE MEDICAL ASA and IMAGIN MEDICAL 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 IMAGIN MEDICAL INC are associated (or correlated) with OBSERVE MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBSERVE MEDICAL ASA has no effect on the direction of IMAGIN MEDICAL i.e., IMAGIN MEDICAL and OBSERVE MEDICAL go up and down completely randomly.
Pair Corralation between IMAGIN MEDICAL and OBSERVE MEDICAL
Assuming the 90 days trading horizon IMAGIN MEDICAL INC is expected to generate 3.48 times more return on investment than OBSERVE MEDICAL. However, IMAGIN MEDICAL is 3.48 times more volatile than OBSERVE MEDICAL ASA. It trades about 0.17 of its potential returns per unit of risk. OBSERVE MEDICAL ASA is currently generating about 0.07 per unit of risk. If you would invest 9.04 in IMAGIN MEDICAL INC on October 14, 2024 and sell it today you would lose (8.99) from holding IMAGIN MEDICAL INC or give up 99.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
IMAGIN MEDICAL INC vs. OBSERVE MEDICAL ASA
Performance |
| Timeline |
| IMAGIN MEDICAL INC |
| OBSERVE MEDICAL ASA |
IMAGIN MEDICAL and OBSERVE MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMAGIN MEDICAL and OBSERVE MEDICAL
The main advantage of trading using opposite IMAGIN MEDICAL and OBSERVE MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMAGIN MEDICAL position performs unexpectedly, OBSERVE MEDICAL 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 OBSERVE MEDICAL will offset losses from the drop in OBSERVE MEDICAL's long position.| IMAGIN MEDICAL vs. Nippon Light Metal | IMAGIN MEDICAL vs. MICRONIC MYDATA | IMAGIN MEDICAL vs. Datadog | IMAGIN MEDICAL vs. China Datang |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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