Correlation Between Impax Environmental and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining, you can compare the effects of market volatilities on Impax Environmental and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Beowulf Mining.
Diversification Opportunities for Impax Environmental and Beowulf Mining
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Beowulf is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Impax Environmental i.e., Impax Environmental and Beowulf Mining go up and down completely randomly.
Pair Corralation between Impax Environmental and Beowulf Mining
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.22 times more return on investment than Beowulf Mining. However, Impax Environmental Markets is 4.64 times less risky than Beowulf Mining. It trades about 0.02 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.15 per unit of risk. If you would invest 38,122 in Impax Environmental Markets on October 7, 2024 and sell it today you would earn a total of 778.00 from holding Impax Environmental Markets or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Beowulf Mining
Performance |
| Timeline |
| Impax Environmental |
| Beowulf Mining |
Impax Environmental and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Beowulf Mining
The main advantage of trading using opposite Impax Environmental and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.| Impax Environmental vs. Toyota Motor Corp | Impax Environmental vs. OTP Bank Nyrt | Impax Environmental vs. Agilent Technologies | Impax Environmental vs. Newmont Corp |
| Beowulf Mining vs. Antofagasta PLC | Beowulf Mining vs. Atalaya Mining | Beowulf Mining vs. Central Asia Metals | Beowulf Mining vs. Anglo Asian Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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