Correlation Between IMedia Brands and Meso Numismatics
Can any of the company-specific risk be diversified away by investing in both IMedia Brands and Meso Numismatics 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 IMedia Brands and Meso Numismatics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMedia Brands and Meso Numismatics, you can compare the effects of market volatilities on IMedia Brands and Meso Numismatics 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 IMedia Brands with a short position of Meso Numismatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMedia Brands and Meso Numismatics.
Diversification Opportunities for IMedia Brands and Meso Numismatics
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IMedia and Meso is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands and Meso Numismatics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meso Numismatics and IMedia Brands 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 IMedia Brands are associated (or correlated) with Meso Numismatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meso Numismatics has no effect on the direction of IMedia Brands i.e., IMedia Brands and Meso Numismatics go up and down completely randomly.
Pair Corralation between IMedia Brands and Meso Numismatics
Given the investment horizon of 90 days IMedia Brands is expected to under-perform the Meso Numismatics. But the stock apears to be less risky and, when comparing its historical volatility, IMedia Brands is 1.32 times less risky than Meso Numismatics. The stock trades about -0.29 of its potential returns per unit of risk. The Meso Numismatics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.20 in Meso Numismatics on August 31, 2024 and sell it today you would earn a total of 2.64 from holding Meso Numismatics or generate 220.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.81% |
| Values | Daily Returns |
IMedia Brands vs. Meso Numismatics
Performance |
| Timeline |
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Meso Numismatics |
IMedia Brands and Meso Numismatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMedia Brands and Meso Numismatics
The main advantage of trading using opposite IMedia Brands and Meso Numismatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMedia Brands position performs unexpectedly, Meso Numismatics 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 Meso Numismatics will offset losses from the drop in Meso Numismatics' long position.The idea behind IMedia Brands and Meso Numismatics 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.| Meso Numismatics vs. Ulta Beauty | Meso Numismatics vs. Williams Sonoma | Meso Numismatics vs. Dicks Sporting Goods | Meso Numismatics vs. Best Buy Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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