Correlation Between Impax Environmental and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Advanced 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 Impax Environmental and Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Impax Environmental and Advanced 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 Impax Environmental with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Advanced Medical.
Diversification Opportunities for Impax Environmental and Advanced Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Impax and Advanced is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Impax Environmental i.e., Impax Environmental and Advanced Medical go up and down completely randomly.
Pair Corralation between Impax Environmental and Advanced Medical
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.48 times more return on investment than Advanced Medical. However, Impax Environmental Markets is 2.07 times less risky than Advanced Medical. It trades about 0.04 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.25 per unit of risk. If you would invest 38,350 in Impax Environmental Markets on October 10, 2024 and sell it today you would earn a total of 200.00 from holding Impax Environmental Markets or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Advanced Medical Solutions
Performance |
| Timeline |
| Impax Environmental |
| Advanced Medical Sol |
Impax Environmental and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Advanced Medical
The main advantage of trading using opposite Impax Environmental and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Advanced 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Impax Environmental vs. Datagroup SE | Impax Environmental vs. Cembra Money Bank | Impax Environmental vs. CAP LEASE AVIATION | Impax Environmental vs. Alliance Data Systems |
| Advanced Medical vs. Wizz Air Holdings | Advanced Medical vs. Sealed Air Corp | Advanced Medical vs. Amedeo Air Four | Advanced Medical vs. Systemair AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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