Correlation Between CHAR Technologies and Imaflex
Can any of the company-specific risk be diversified away by investing in both CHAR Technologies 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 CHAR Technologies and Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHAR Technologies and Imaflex, you can compare the effects of market volatilities on CHAR Technologies 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 CHAR Technologies with a short position of Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAR Technologies and Imaflex.
Diversification Opportunities for CHAR Technologies and Imaflex
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CHAR and Imaflex is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CHAR Technologies and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and CHAR Technologies 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 CHAR 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 CHAR Technologies i.e., CHAR Technologies and Imaflex go up and down completely randomly.
Pair Corralation between CHAR Technologies and Imaflex
Assuming the 90 days horizon CHAR Technologies is expected to under-perform the Imaflex. In addition to that, CHAR Technologies is 1.3 times more volatile than Imaflex. It trades about -0.07 of its total potential returns per unit of risk. Imaflex is currently generating about 0.03 per unit of volatility. If you would invest 127.00 in Imaflex on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Imaflex or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHAR Technologies vs. Imaflex
Performance |
| Timeline |
| CHAR Technologies |
| Imaflex |
CHAR Technologies and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAR Technologies and Imaflex
The main advantage of trading using opposite CHAR Technologies and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAR Technologies 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.| CHAR Technologies vs. Environmental Waste International | CHAR Technologies vs. BluMetric Environmental | CHAR Technologies vs. Clear Blue Technologies | CHAR Technologies vs. Eguana Technologies |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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