Correlation Between Environmental Waste and Imaflex
Can any of the company-specific risk be diversified away by investing in both Environmental Waste 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 Environmental Waste and Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Environmental Waste International and Imaflex, you can compare the effects of market volatilities on Environmental Waste 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 Environmental Waste with a short position of Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Environmental Waste and Imaflex.
Diversification Opportunities for Environmental Waste and Imaflex
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Environmental and Imaflex is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Environmental Waste Internatio and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and Environmental Waste 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 Environmental Waste International 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 Environmental Waste i.e., Environmental Waste and Imaflex go up and down completely randomly.
Pair Corralation between Environmental Waste and Imaflex
Assuming the 90 days horizon Environmental Waste International is expected to generate 6.72 times more return on investment than Imaflex. However, Environmental Waste is 6.72 times more volatile than Imaflex. It trades about 0.06 of its potential returns per unit of risk. Imaflex is currently generating about 0.03 per unit of risk. If you would invest 4.00 in Environmental Waste International on September 1, 2024 and sell it today you would lose (3.50) from holding Environmental Waste International or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Environmental Waste Internatio vs. Imaflex
Performance |
| Timeline |
| Environmental Waste |
| Imaflex |
Environmental Waste and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Environmental Waste and Imaflex
The main advantage of trading using opposite Environmental Waste and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmental Waste 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.| Environmental Waste vs. Clear Blue Technologies | Environmental Waste vs. Current Water Technologies | Environmental Waste vs. Thermal Energy International | Environmental Waste vs. Aurora Solar 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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