Correlation Between Four Seasons and Impac Mortgage
Can any of the company-specific risk be diversified away by investing in both Four Seasons and Impac Mortgage 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 Four Seasons and Impac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Seasons Education and Impac Mortgage Holdings, you can compare the effects of market volatilities on Four Seasons and Impac Mortgage 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 Four Seasons with a short position of Impac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Seasons and Impac Mortgage.
Diversification Opportunities for Four Seasons and Impac Mortgage
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Four and Impac is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Four Seasons Education and Impac Mortgage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impac Mortgage Holdings and Four Seasons 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 Four Seasons Education are associated (or correlated) with Impac Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impac Mortgage Holdings has no effect on the direction of Four Seasons i.e., Four Seasons and Impac Mortgage go up and down completely randomly.
Pair Corralation between Four Seasons and Impac Mortgage
Given the investment horizon of 90 days Four Seasons Education is expected to generate 5.46 times more return on investment than Impac Mortgage. However, Four Seasons is 5.46 times more volatile than Impac Mortgage Holdings. It trades about 0.08 of its potential returns per unit of risk. Impac Mortgage Holdings is currently generating about 0.11 per unit of risk. If you would invest 1,101 in Four Seasons Education on September 3, 2024 and sell it today you would lose (56.00) from holding Four Seasons Education or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.6% |
| Values | Daily Returns |
Four Seasons Education vs. Impac Mortgage Holdings
Performance |
| Timeline |
| Four Seasons Education |
| Impac Mortgage Holdings |
Four Seasons and Impac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Seasons and Impac Mortgage
The main advantage of trading using opposite Four Seasons and Impac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Seasons position performs unexpectedly, Impac Mortgage 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 Impac Mortgage will offset losses from the drop in Impac Mortgage's long position.| Four Seasons vs. Wah Fu Education | Four Seasons vs. Sunlands Technology Group | Four Seasons vs. 51Talk Online Education | Four Seasons vs. China Liberal Education |
| Impac Mortgage vs. Xponential Fitness | Impac Mortgage vs. Hooker Furniture | Impac Mortgage vs. Brunswick | Impac Mortgage vs. Lindblad Expeditions Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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