Correlation Between POWER METALS and Impinj
Can any of the company-specific risk be diversified away by investing in both POWER METALS and Impinj 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 POWER METALS and Impinj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POWER METALS and Impinj Inc, you can compare the effects of market volatilities on POWER METALS and Impinj 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 POWER METALS with a short position of Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWER METALS and Impinj.
Diversification Opportunities for POWER METALS and Impinj
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POWER and Impinj is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding POWER METALS and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and POWER METALS 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 POWER METALS are associated (or correlated) with Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of POWER METALS i.e., POWER METALS and Impinj go up and down completely randomly.
Pair Corralation between POWER METALS and Impinj
Assuming the 90 days trading horizon POWER METALS is expected to generate 1.51 times less return on investment than Impinj. In addition to that, POWER METALS is 1.37 times more volatile than Impinj Inc. It trades about 0.02 of its total potential returns per unit of risk. Impinj Inc is currently generating about 0.04 per unit of volatility. If you would invest 11,420 in Impinj Inc on September 3, 2024 and sell it today you would earn a total of 6,520 from holding Impinj Inc or generate 57.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POWER METALS vs. Impinj Inc
Performance |
| Timeline |
| POWER METALS |
| Impinj Inc |
POWER METALS and Impinj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWER METALS and Impinj
The main advantage of trading using opposite POWER METALS and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWER METALS position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.| POWER METALS vs. HANOVER INSURANCE | POWER METALS vs. Ping An Insurance | POWER METALS vs. REVO INSURANCE SPA | POWER METALS vs. RETAIL FOOD GROUP |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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