Correlation Between First and Impax Environmental
Can any of the company-specific risk be diversified away by investing in both First and Impax Environmental 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 First and Impax Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Class Metals and Impax Environmental Markets, you can compare the effects of market volatilities on First and Impax Environmental 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 First with a short position of Impax Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of First and Impax Environmental.
Diversification Opportunities for First and Impax Environmental
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Impax is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Class Metals and Impax Environmental Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Environmental and First 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 First Class Metals are associated (or correlated) with Impax Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Environmental has no effect on the direction of First i.e., First and Impax Environmental go up and down completely randomly.
Pair Corralation between First and Impax Environmental
Assuming the 90 days trading horizon First Class Metals is expected to under-perform the Impax Environmental. In addition to that, First is 3.61 times more volatile than Impax Environmental Markets. It trades about -0.15 of its total potential returns per unit of risk. Impax Environmental Markets is currently generating about 0.24 per unit of volatility. If you would invest 38,900 in Impax Environmental Markets on November 4, 2024 and sell it today you would earn a total of 1,800 from holding Impax Environmental Markets or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Class Metals vs. Impax Environmental Markets
Performance |
| Timeline |
| First Class Metals |
| Impax Environmental |
First and Impax Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First and Impax Environmental
The main advantage of trading using opposite First and Impax Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First position performs unexpectedly, Impax Environmental 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 Impax Environmental will offset losses from the drop in Impax Environmental's long position.The idea behind First Class Metals and Impax Environmental Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Impax Environmental vs. Gamma Communications PLC | Impax Environmental vs. Orient Telecoms | Impax Environmental vs. Cairo Communication SpA | Impax Environmental vs. Seche Environnement SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |