Correlation Between IMPERIAL TOBACCO and IMAGIN MEDICAL

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Can any of the company-specific risk be diversified away by investing in both IMPERIAL TOBACCO and IMAGIN MEDICAL 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 IMPERIAL TOBACCO and IMAGIN MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMPERIAL TOBACCO and IMAGIN MEDICAL INC, you can compare the effects of market volatilities on IMPERIAL TOBACCO and IMAGIN MEDICAL 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 IMPERIAL TOBACCO with a short position of IMAGIN MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPERIAL TOBACCO and IMAGIN MEDICAL.

Diversification Opportunities for IMPERIAL TOBACCO and IMAGIN MEDICAL

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between IMPERIAL and IMAGIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO and IMAGIN MEDICAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMAGIN MEDICAL INC and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO are associated (or correlated) with IMAGIN MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMAGIN MEDICAL INC has no effect on the direction of IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and IMAGIN MEDICAL go up and down completely randomly.

Pair Corralation between IMPERIAL TOBACCO and IMAGIN MEDICAL

If you would invest  2,998  in IMPERIAL TOBACCO on September 24, 2024 and sell it today you would earn a total of  83.00  from holding IMPERIAL TOBACCO or generate 2.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

IMPERIAL TOBACCO   vs.  IMAGIN MEDICAL INC

 Performance 
       Timeline  
IMPERIAL TOBACCO 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in IMPERIAL TOBACCO are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, IMPERIAL TOBACCO unveiled solid returns over the last few months and may actually be approaching a breakup point.
IMAGIN MEDICAL INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days IMAGIN MEDICAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, IMAGIN MEDICAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

IMPERIAL TOBACCO and IMAGIN MEDICAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IMPERIAL TOBACCO and IMAGIN MEDICAL

The main advantage of trading using opposite IMPERIAL TOBACCO and IMAGIN MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO position performs unexpectedly, IMAGIN MEDICAL 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 IMAGIN MEDICAL will offset losses from the drop in IMAGIN MEDICAL's long position.
The idea behind IMPERIAL TOBACCO and IMAGIN MEDICAL INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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