Correlation Between ALEFARM BREWING and Impinj

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

By analyzing existing cross correlation between ALEFARM BREWING DK 05 and Impinj Inc, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and Impinj.

Diversification Opportunities for ALEFARM BREWING and Impinj

0.8

Correlation Coefficient

ALEFARM BREWING  Impinj

Very poor diversification

The 3 months correlation between ALEFARM and Impinj is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and Impinj go up and down completely randomly.

Pair Corralation between ALEFARM BREWING and Impinj

Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the Impinj. In addition to that, ALEFARM BREWING is 1.21 times more volatile than Impinj Inc. It trades about -0.01 of its total potential returns per unit of risk. Impinj Inc is currently generating about 0.06 per unit of volatility. If you would invest  8,000  in Impinj Inc on October 4, 2024 and sell it today you would earn a total of  5,945  from holding Impinj Inc or generate 74.31% return on investment over 90 days.

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

ALEFARM BREWING DK 05  vs.  Impinj Inc

ALEFARM BREWING DK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALEFARM BREWING DK 05 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ALEFARM BREWING and Impinj

The main advantage of trading using opposite ALEFARM BREWING and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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.

The idea behind ALEFARM BREWING DK 05 and Impinj Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .