Correlation Between Impax Asset and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Gamma Communications 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 Gamma Communications 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 Gamma Communications PLC, you can compare the effects of market volatilities on Impax Asset and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Gamma Communications.
Diversification Opportunities for Impax Asset and Gamma Communications
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Impax and Gamma is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Impax Asset i.e., Impax Asset and Gamma Communications go up and down completely randomly.
Pair Corralation between Impax Asset and Gamma Communications
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Gamma Communications. In addition to that, Impax Asset is 1.75 times more volatile than Gamma Communications PLC. It trades about -0.1 of its total potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.05 per unit of volatility. If you would invest 144,307 in Gamma Communications PLC on August 25, 2024 and sell it today you would earn a total of 14,093 from holding Gamma Communications PLC or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. Gamma Communications PLC
Performance |
| Timeline |
| Impax Asset Management |
| Gamma Communications PLC |
Impax Asset and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Gamma Communications
The main advantage of trading using opposite Impax Asset and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Impax Asset vs. International Biotechnology Trust | Impax Asset vs. Raytheon Technologies Corp | Impax Asset vs. Playtech Plc | Impax Asset vs. Uber Technologies |
| Gamma Communications vs. Naked Wines plc | Gamma Communications vs. Zoom Video Communications | Gamma Communications vs. Smithson Investment Trust | Gamma Communications vs. Universal Music Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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