Correlation Between Impax Asset and TEAM Plc
Can any of the company-specific risk be diversified away by investing in both Impax Asset and TEAM Plc 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 TEAM Plc 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 TEAM plc, you can compare the effects of market volatilities on Impax Asset and TEAM Plc 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 TEAM Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and TEAM Plc.
Diversification Opportunities for Impax Asset and TEAM Plc
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Impax and TEAM is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and TEAM plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEAM 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 TEAM Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEAM plc has no effect on the direction of Impax Asset i.e., Impax Asset and TEAM Plc go up and down completely randomly.
Pair Corralation between Impax Asset and TEAM Plc
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the TEAM Plc. In addition to that, Impax Asset is 1.27 times more volatile than TEAM plc. It trades about -0.12 of its total potential returns per unit of risk. TEAM plc is currently generating about -0.08 per unit of volatility. If you would invest 1,540 in TEAM plc on November 3, 2024 and sell it today you would lose (365.00) from holding TEAM plc or give up 23.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. TEAM plc
Performance |
| Timeline |
| Impax Asset Management |
| TEAM plc |
Impax Asset and TEAM Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and TEAM Plc
The main advantage of trading using opposite Impax Asset and TEAM Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, TEAM Plc 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 TEAM Plc will offset losses from the drop in TEAM Plc's long position.| Impax Asset vs. Coeur Mining | Impax Asset vs. Hilton Food Group | Impax Asset vs. Baker Steel Resources | Impax Asset vs. Associated British Foods |
| TEAM Plc vs. Cairn Homes PLC | TEAM Plc vs. Endeavour Mining Corp | TEAM Plc vs. URU Metals | TEAM Plc vs. Beazer Homes USA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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