Correlation Between Impax Asset and Pharol SGPS
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Pharol SGPS 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 Impax Asset and Pharol SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Asset Management and Pharol SGPS SA, you can compare the effects of market volatilities on Impax Asset and Pharol SGPS 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 Impax Asset with a short position of Pharol SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Pharol SGPS.
Diversification Opportunities for Impax Asset and Pharol SGPS
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Pharol is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Pharol SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharol SGPS SA and Impax Asset 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 Impax Asset Management are associated (or correlated) with Pharol SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharol SGPS SA has no effect on the direction of Impax Asset i.e., Impax Asset and Pharol SGPS go up and down completely randomly.
Pair Corralation between Impax Asset and Pharol SGPS
Assuming the 90 days trading horizon Impax Asset is expected to generate 36.89 times less return on investment than Pharol SGPS. But when comparing it to its historical volatility, Impax Asset Management is 2.77 times less risky than Pharol SGPS. It trades about 0.02 of its potential returns per unit of risk. Pharol SGPS SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3.94 in Pharol SGPS SA on September 13, 2024 and sell it today you would earn a total of 0.94 from holding Pharol SGPS SA or generate 23.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. Pharol SGPS SA
Performance |
| Timeline |
| Impax Asset Management |
| Pharol SGPS SA |
Impax Asset and Pharol SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Pharol SGPS
The main advantage of trading using opposite Impax Asset and Pharol SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Pharol SGPS 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 Pharol SGPS will offset losses from the drop in Pharol SGPS's long position.| Impax Asset vs. Catalyst Media Group | Impax Asset vs. CATLIN GROUP | Impax Asset vs. Tamburi Investment Partners | Impax Asset vs. Magnora ASA |
| Pharol SGPS vs. CompuGroup Medical AG | Pharol SGPS vs. Jupiter Fund Management | Pharol SGPS vs. Futura Medical | Pharol SGPS vs. Impax Asset Management |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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