Correlation Between Current Water and Imaflex
Can any of the company-specific risk be diversified away by investing in both Current Water and Imaflex 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 Current Water and Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Current Water Technologies and Imaflex, you can compare the effects of market volatilities on Current Water and Imaflex 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 Current Water with a short position of Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Current Water and Imaflex.
Diversification Opportunities for Current Water and Imaflex
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Current and Imaflex is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Current Water Technologies and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and Current Water 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 Current Water Technologies are associated (or correlated) with Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of Current Water i.e., Current Water and Imaflex go up and down completely randomly.
Pair Corralation between Current Water and Imaflex
Assuming the 90 days trading horizon Current Water Technologies is expected to generate 4.12 times more return on investment than Imaflex. However, Current Water is 4.12 times more volatile than Imaflex. It trades about 0.06 of its potential returns per unit of risk. Imaflex is currently generating about 0.03 per unit of risk. If you would invest 3.00 in Current Water Technologies on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Current Water Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Current Water Technologies vs. Imaflex
Performance |
| Timeline |
| Current Water Techno |
| Imaflex |
Current Water and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Current Water and Imaflex
The main advantage of trading using opposite Current Water and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Current Water position performs unexpectedly, Imaflex 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 Imaflex will offset losses from the drop in Imaflex's long position.| Current Water vs. Firan Technology Group | Current Water vs. Baylin Technologies | Current Water vs. iShares Canadian HYBrid | Current Water vs. Altagas Cum Red |
| Imaflex vs. AirIQ Inc | Imaflex vs. NamSys Inc | Imaflex vs. Supremex | Imaflex vs. Atlas Engineered Products |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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