Correlation Between Imed Infinity and Israel China
Can any of the company-specific risk be diversified away by investing in both Imed Infinity and Israel China 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 Israel China 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 Israel China Biotechnology, you can compare the effects of market volatilities on Imed Infinity and Israel China 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 Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imed Infinity and Israel China.
Diversification Opportunities for Imed Infinity and Israel China
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Imed and Israel is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech 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 Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Imed Infinity i.e., Imed Infinity and Israel China go up and down completely randomly.
Pair Corralation between Imed Infinity and Israel China
Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to generate 0.58 times more return on investment than Israel China. However, Imed Infinity Medical Limited is 1.74 times less risky than Israel China. It trades about 0.02 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.08 per unit of risk. If you would invest 9,820 in Imed Infinity Medical Limited on September 1, 2024 and sell it today you would earn a total of 120.00 from holding Imed Infinity Medical Limited or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imed Infinity Medical Limited vs. Israel China Biotechnology
Performance |
| Timeline |
| Imed Infinity Medical |
| Israel China Biotech |
Imed Infinity and Israel China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imed Infinity and Israel China
The main advantage of trading using opposite Imed Infinity and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imed Infinity position performs unexpectedly, Israel China 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 Israel China will offset losses from the drop in Israel China's long position.| Imed Infinity vs. ICL Israel Chemicals | Imed Infinity vs. Abra Information Technologies | Imed Infinity vs. Dan Hotels | Imed Infinity vs. Altshuler Shaham Financial |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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