Correlation Between Impax Asset and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Impax Asset and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Arrow Electronics.
Diversification Opportunities for Impax Asset and Arrow Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Impax and Arrow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Impax Asset i.e., Impax Asset and Arrow Electronics go up and down completely randomly.
Pair Corralation between Impax Asset and Arrow Electronics
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Arrow Electronics. In addition to that, Impax Asset is 4.27 times more volatile than Arrow Electronics. It trades about -0.25 of its total potential returns per unit of risk. Arrow Electronics is currently generating about -0.3 per unit of volatility. If you would invest 12,099 in Arrow Electronics on October 11, 2024 and sell it today you would lose (956.00) from holding Arrow Electronics or give up 7.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Impax Asset Management vs. Arrow Electronics
Performance |
| Timeline |
| Impax Asset Management |
| Arrow Electronics |
Impax Asset and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Arrow Electronics
The main advantage of trading using opposite Impax Asset and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Impax Asset vs. Telecom Italia SpA | Impax Asset vs. HCA Healthcare | Impax Asset vs. Aeorema Communications Plc | Impax Asset vs. Medical Properties Trust |
| Arrow Electronics vs. MTI Wireless Edge | Arrow Electronics vs. Synthomer plc | Arrow Electronics vs. Beazer Homes USA | Arrow Electronics vs. Zoom Video Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |