Correlation Between Imed Infinity and B Communications
Can any of the company-specific risk be diversified away by investing in both Imed Infinity and B Communications 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 Imed Infinity and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imed Infinity Medical Limited and B Communications, you can compare the effects of market volatilities on Imed Infinity and B Communications 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 Imed Infinity with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imed Infinity and B Communications.
Diversification Opportunities for Imed Infinity and B Communications
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Imed and BCOM is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Imed Infinity 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 Imed Infinity Medical Limited are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Imed Infinity i.e., Imed Infinity and B Communications go up and down completely randomly.
Pair Corralation between Imed Infinity and B Communications
Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to generate 1.83 times more return on investment than B Communications. However, Imed Infinity is 1.83 times more volatile than B Communications. It trades about 0.06 of its potential returns per unit of risk. B Communications is currently generating about 0.07 per unit of risk. If you would invest 7,880 in Imed Infinity Medical Limited on November 3, 2024 and sell it today you would earn a total of 2,840 from holding Imed Infinity Medical Limited or generate 36.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Imed Infinity Medical Limited vs. B Communications
Performance |
| Timeline |
| Imed Infinity Medical |
| B Communications |
Imed Infinity and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imed Infinity and B Communications
The main advantage of trading using opposite Imed Infinity and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imed Infinity position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' long position.| Imed Infinity vs. B Communications | Imed Infinity vs. Ram On Investments and | Imed Infinity vs. Rapac Communication Infrastructure | Imed Infinity vs. MEITAV INVESTMENTS HOUSE |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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