Correlation Between Impax Environmental and Admiral Group
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Admiral Group 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 Impax Environmental and Admiral Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Admiral Group PLC, you can compare the effects of market volatilities on Impax Environmental and Admiral Group 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 Impax Environmental with a short position of Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Admiral Group.
Diversification Opportunities for Impax Environmental and Admiral Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Impax and Admiral is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC and Impax Environmental 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 Impax Environmental Markets are associated (or correlated) with Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of Impax Environmental i.e., Impax Environmental and Admiral Group go up and down completely randomly.
Pair Corralation between Impax Environmental and Admiral Group
Assuming the 90 days trading horizon Impax Environmental Markets is expected to under-perform the Admiral Group. But the stock apears to be less risky and, when comparing its historical volatility, Impax Environmental Markets is 1.96 times less risky than Admiral Group. The stock trades about -0.24 of its potential returns per unit of risk. The Admiral Group PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 255,300 in Admiral Group PLC on September 4, 2024 and sell it today you would earn a total of 5,500 from holding Admiral Group PLC or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Admiral Group PLC
Performance |
| Timeline |
| Impax Environmental |
| Admiral Group PLC |
Impax Environmental and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Admiral Group
The main advantage of trading using opposite Impax Environmental and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| Impax Environmental vs. SupplyMe Capital PLC | Impax Environmental vs. Lloyds Banking Group | Impax Environmental vs. Premier African Minerals | Impax Environmental vs. SANTANDER UK 8 |
| Admiral Group vs. Quadrise Plc | Admiral Group vs. ImmuPharma PLC | Admiral Group vs. Intuitive Investments Group | Admiral Group vs. European Metals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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