Correlation Between Imeik Technology and Wasu Media

Can any of the company-specific risk be diversified away by investing in both Imeik Technology and Wasu Media 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 Imeik Technology and Wasu Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imeik Technology Development and Wasu Media Holding, you can compare the effects of market volatilities on Imeik Technology and Wasu Media 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 Imeik Technology with a short position of Wasu Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imeik Technology and Wasu Media.

Diversification Opportunities for Imeik Technology and Wasu Media

0.49

Correlation Coefficient

Imeik Technology  Wasu Media

Very weak diversification

The 3 months correlation between Imeik and Wasu is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Imeik Technology Development and Wasu Media Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasu Media Holding and Imeik Technology 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 Imeik Technology Development are associated (or correlated) with Wasu Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasu Media Holding has no effect on the direction of Imeik Technology i.e., Imeik Technology and Wasu Media go up and down completely randomly.

Pair Corralation between Imeik Technology and Wasu Media

Assuming the 90 days trading horizon Imeik Technology Development is expected to generate 1.98 times more return on investment than Wasu Media. However, Imeik Technology is 1.98 times more volatile than Wasu Media Holding. It trades about 0.05 of its potential returns per unit of risk. Wasu Media Holding is currently generating about 0.08 per unit of risk. If you would invest  15,516  in Imeik Technology Development on October 4, 2024 and sell it today you would earn a total of  2,734  from holding Imeik Technology Development or generate 17.62% return on investment over 90 days.

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

Imeik Technology Development  vs.  Wasu Media Holding

Imeik Technology Dev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imeik Technology Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Wasu Media Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wasu Media Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Imeik Technology and Wasu Media

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

The idea behind Imeik Technology Development and Wasu Media Holding 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.