Correlation Between Libra Insurance and Imed Infinity
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Imed Infinity 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 Libra Insurance and Imed Infinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Imed Infinity Medical Limited, you can compare the effects of market volatilities on Libra Insurance and Imed Infinity 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 Libra Insurance with a short position of Imed Infinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Imed Infinity.
Diversification Opportunities for Libra Insurance and Imed Infinity
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Libra and Imed is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Imed Infinity Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imed Infinity Medical and Libra Insurance 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 Libra Insurance are associated (or correlated) with Imed Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imed Infinity Medical has no effect on the direction of Libra Insurance i.e., Libra Insurance and Imed Infinity go up and down completely randomly.
Pair Corralation between Libra Insurance and Imed Infinity
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.41 times more return on investment than Imed Infinity. However, Libra Insurance is 2.44 times less risky than Imed Infinity. It trades about 0.21 of its potential returns per unit of risk. Imed Infinity Medical Limited is currently generating about 0.06 per unit of risk. If you would invest 32,290 in Libra Insurance on August 29, 2024 and sell it today you would earn a total of 50,420 from holding Libra Insurance or generate 156.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Imed Infinity Medical Limited
Performance |
| Timeline |
| Libra Insurance |
| Imed Infinity Medical |
Libra Insurance and Imed Infinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Imed Infinity
The main advantage of trading using opposite Libra Insurance and Imed Infinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Imed Infinity 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 Imed Infinity will offset losses from the drop in Imed Infinity's long position.The idea behind Libra Insurance and Imed Infinity Medical Limited 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.| Imed Infinity vs. Brainsway | Imed Infinity vs. Mivne Real Estate | Imed Infinity vs. Photomyne | Imed Infinity vs. Bezeq Israeli Telecommunication |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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