Correlation Between Carlson Investments and IMC SA

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

By analyzing existing cross correlation between Carlson Investments SA and IMC SA, you can compare the effects of market volatilities on Carlson Investments and IMC SA 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 Carlson Investments with a short position of IMC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and IMC SA.

Diversification Opportunities for Carlson Investments and IMC SA

-0.19

Correlation Coefficient

Carlson Investments  IMC SA

Good diversification

The 3 months correlation between Carlson and IMC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and IMC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMC SA and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with IMC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMC SA has no effect on the direction of Carlson Investments i.e., Carlson Investments and IMC SA go up and down completely randomly.

Pair Corralation between Carlson Investments and IMC SA

Assuming the 90 days trading horizon Carlson Investments SA is expected to under-perform the IMC SA. In addition to that, Carlson Investments is 1.07 times more volatile than IMC SA. It trades about -0.08 of its total potential returns per unit of risk. IMC SA is currently generating about 0.14 per unit of volatility. If you would invest  1,230  in IMC SA on September 12, 2024 and sell it today you would earn a total of  330.00  from holding IMC SA or generate 26.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Carlson Investments SA  vs.  IMC SA

Carlson Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlson Investments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

IMC SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IMC SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IMC SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlson Investments and IMC SA

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

The idea behind Carlson Investments SA and IMC SA 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.