Correlation Between Imed Infinity and Brainsway
Can any of the company-specific risk be diversified away by investing in both Imed Infinity and Brainsway 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 Brainsway 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 Brainsway, you can compare the effects of market volatilities on Imed Infinity and Brainsway 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 Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imed Infinity and Brainsway.
Diversification Opportunities for Imed Infinity and Brainsway
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imed and Brainsway is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway 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 Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Imed Infinity i.e., Imed Infinity and Brainsway go up and down completely randomly.
Pair Corralation between Imed Infinity and Brainsway
Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to under-perform the Brainsway. But the stock apears to be less risky and, when comparing its historical volatility, Imed Infinity Medical Limited is 1.71 times less risky than Brainsway. The stock trades about -0.35 of its potential returns per unit of risk. The Brainsway is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 195,300 in Brainsway on September 2, 2024 and sell it today you would lose (19,200) from holding Brainsway or give up 9.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imed Infinity Medical Limited vs. Brainsway
Performance |
| Timeline |
| Imed Infinity Medical |
| Brainsway |
Imed Infinity and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imed Infinity and Brainsway
The main advantage of trading using opposite Imed Infinity and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imed Infinity position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.| Imed Infinity vs. Brainsway | Imed Infinity vs. Mivne Real Estate | Imed Infinity vs. Photomyne | Imed Infinity vs. Israel Land Development |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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