Correlation Between IMC SA and New Tech
Can any of the company-specific risk be diversified away by investing in both IMC SA and New Tech 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 IMC SA and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMC SA and New Tech Venture, you can compare the effects of market volatilities on IMC SA and New Tech 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 IMC SA with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMC SA and New Tech.
Diversification Opportunities for IMC SA and New Tech
Excellent diversification
The 3 months correlation between IMC and New is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding IMC SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and IMC SA 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 IMC SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of IMC SA i.e., IMC SA and New Tech go up and down completely randomly.
Pair Corralation between IMC SA and New Tech
Assuming the 90 days trading horizon IMC SA is expected to generate 1.39 times more return on investment than New Tech. However, IMC SA is 1.39 times more volatile than New Tech Venture. It trades about 0.31 of its potential returns per unit of risk. New Tech Venture is currently generating about 0.01 per unit of risk. If you would invest 1,090 in IMC SA on September 5, 2024 and sell it today you would earn a total of 310.00 from holding IMC SA or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
IMC SA vs. New Tech Venture
Performance |
| Timeline |
| IMC SA |
| New Tech Venture |
IMC SA and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMC SA and New Tech
The main advantage of trading using opposite IMC SA and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMC SA position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| IMC SA vs. Mlk Foods Public | IMC SA vs. Creotech Instruments SA | IMC SA vs. New Tech Venture | IMC SA vs. Marie Brizard Wine |
| New Tech vs. Asseco Business Solutions | New Tech vs. Kogeneracja SA | New Tech vs. Asseco South Eastern | New Tech vs. Movie Games SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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