Correlation Between Impax Asset and Alliance Data
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Alliance Data 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 Alliance Data 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 Alliance Data Systems, you can compare the effects of market volatilities on Impax Asset and Alliance Data 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 Alliance Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Alliance Data.
Diversification Opportunities for Impax Asset and Alliance Data
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Impax and Alliance is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Alliance Data Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Data Systems 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 Alliance Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Data Systems has no effect on the direction of Impax Asset i.e., Impax Asset and Alliance Data go up and down completely randomly.
Pair Corralation between Impax Asset and Alliance Data
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Alliance Data. But the stock apears to be less risky and, when comparing its historical volatility, Impax Asset Management is 1.2 times less risky than Alliance Data. The stock trades about -0.03 of its potential returns per unit of risk. The Alliance Data Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,589 in Alliance Data Systems on September 12, 2024 and sell it today you would earn a total of 2,889 from holding Alliance Data Systems or generate 80.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.39% |
| Values | Daily Returns |
Impax Asset Management vs. Alliance Data Systems
Performance |
| Timeline |
| Impax Asset Management |
| Alliance Data Systems |
Impax Asset and Alliance Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Alliance Data
The main advantage of trading using opposite Impax Asset and Alliance Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Alliance Data 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 Alliance Data will offset losses from the drop in Alliance Data's long position.| Impax Asset vs. Samsung Electronics Co | Impax Asset vs. Samsung Electronics Co | Impax Asset vs. Hyundai Motor | Impax Asset vs. Toyota Motor Corp |
| Alliance Data vs. Hong Kong Land | Alliance Data vs. Neometals | Alliance Data vs. Coor Service Management | Alliance Data vs. Fidelity Sustainable USD |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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