Correlation Between Iron Mountain and Impax Asset

Can any of the company-specific risk be diversified away by investing in both Iron Mountain and Impax Asset 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 Iron Mountain and Impax Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iron Mountain and Impax Asset Management, you can compare the effects of market volatilities on Iron Mountain and Impax Asset 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 Iron Mountain with a short position of Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Impax Asset.

Diversification Opportunities for Iron Mountain and Impax Asset

0.39

Correlation Coefficient

Iron Mountain  Impax Asset

Weak diversification

The 3 months correlation between Iron and Impax is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Iron Mountain 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 Iron Mountain are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Iron Mountain i.e., Iron Mountain and Impax Asset go up and down completely randomly.

Pair Corralation between Iron Mountain and Impax Asset

Assuming the 90 days trading horizon Iron Mountain is expected to under-perform the Impax Asset. In addition to that, Iron Mountain is 1.17 times more volatile than Impax Asset Management. It trades about -0.11 of its total potential returns per unit of risk. Impax Asset Management is currently generating about -0.08 per unit of volatility. If you would invest  21,765  in Impax Asset Management on December 30, 2024 and sell it today you would lose (2,305) from holding Impax Asset Management or give up 10.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Iron Mountain  vs.  Impax Asset Management

Iron Mountain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iron Mountain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Impax Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Impax Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Iron Mountain and Impax Asset

The main advantage of trading using opposite Iron Mountain and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.

The idea behind Iron Mountain and Impax Asset Management 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.