Correlation Between Impax Asset and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Impax Asset and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Bankers Investment.
Diversification Opportunities for Impax Asset and Bankers Investment
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Impax and Bankers is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Impax Asset i.e., Impax Asset and Bankers Investment go up and down completely randomly.
Pair Corralation between Impax Asset and Bankers Investment
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Bankers Investment. In addition to that, Impax Asset is 5.08 times more volatile than Bankers Investment Trust. It trades about -0.22 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.2 per unit of volatility. If you would invest 11,139 in Bankers Investment Trust on October 26, 2024 and sell it today you would earn a total of 1,021 from holding Bankers Investment Trust or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. Bankers Investment Trust
Performance |
| Timeline |
| Impax Asset Management |
| Bankers Investment Trust |
Impax Asset and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Bankers Investment
The main advantage of trading using opposite Impax Asset and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Impax Asset vs. EJF Investments | Impax Asset vs. FC Investment Trust | Impax Asset vs. New Residential Investment | Impax Asset vs. Tavistock Investments Plc |
| Bankers Investment vs. SupplyMe Capital PLC | Bankers Investment vs. Premier African Minerals | Bankers Investment vs. SANTANDER UK 8 | Bankers Investment vs. Tower Resources plc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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