Correlation Between Coinsilium and Image Protect

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

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

Diversification Opportunities for Coinsilium and Image Protect

0.26

Correlation Coefficient

Coinsilium  Image Protect

Modest diversification

The 3 months correlation between Coinsilium and Image is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coinsilium Group and Image Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Image Protect and Coinsilium 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 Coinsilium Group are associated (or correlated) with Image Protect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Image Protect has no effect on the direction of Coinsilium i.e., Coinsilium and Image Protect go up and down completely randomly.

Pair Corralation between Coinsilium and Image Protect

Assuming the 90 days horizon Coinsilium is expected to generate 10.59 times less return on investment than Image Protect. But when comparing it to its historical volatility, Coinsilium Group is 6.53 times less risky than Image Protect. It trades about 0.08 of its potential returns per unit of risk. Image Protect is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Image Protect on December 30, 2024 and sell it today you would lose (0.01) from holding Image Protect or give up 50.0% of portfolio value over 90 days.

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

Coinsilium Group  vs.  Image Protect

Coinsilium Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coinsilium Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Coinsilium reported solid returns over the last few months and may actually be approaching a breakup point.

Image Protect

Risk-Adjusted Performance

OK

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

Pair Trading with Coinsilium and Image Protect

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

The idea behind Coinsilium Group and Image Protect 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.