Correlation Between Brainsway and Imed Infinity

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

By analyzing existing cross correlation between Brainsway and Imed Infinity Medical Limited, you can compare the effects of market volatilities on Brainsway and Imed Infinity 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 Brainsway with a short position of Imed Infinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainsway and Imed Infinity.

Diversification Opportunities for Brainsway and Imed Infinity

0.0

Correlation Coefficient

Brainsway  Imed Infinity

Pay attention - limited upside

The 3 months correlation between Brainsway and Imed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Imed Infinity Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imed Infinity Medical and Brainsway 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 Brainsway are associated (or correlated) with Imed Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imed Infinity Medical has no effect on the direction of Brainsway i.e., Brainsway and Imed Infinity go up and down completely randomly.

Pair Corralation between Brainsway and Imed Infinity

Assuming the 90 days trading horizon Brainsway is expected to under-perform the Imed Infinity. But the stock apears to be less risky and, when comparing its historical volatility, Brainsway is 1.07 times less risky than Imed Infinity. The stock trades about -0.04 of its potential returns per unit of risk. The Imed Infinity Medical Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  9,940  in Imed Infinity Medical Limited on November 29, 2024 and sell it today you would lose (340.00) from holding Imed Infinity Medical Limited or give up 3.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Brainsway  vs.  Imed Infinity Medical Limited

Brainsway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brainsway 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.

Imed Infinity Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imed Infinity Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Imed Infinity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brainsway and Imed Infinity

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

The idea behind Brainsway and Imed Infinity Medical Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.