Correlation Between Clime Investment and Iress

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

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

Diversification Opportunities for Clime Investment and Iress

-0.27

Correlation Coefficient

Clime Investment  Iress

Very good diversification

The 3 months correlation between Clime and Iress is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and Iress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iress and Clime Investment 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 Clime Investment Management are associated (or correlated) with Iress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iress has no effect on the direction of Clime Investment i.e., Clime Investment and Iress go up and down completely randomly.

Pair Corralation between Clime Investment and Iress

Assuming the 90 days trading horizon Clime Investment is expected to generate 25.64 times less return on investment than Iress. But when comparing it to its historical volatility, Clime Investment Management is 1.25 times less risky than Iress. It trades about 0.0 of its potential returns per unit of risk. Iress is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  870.00  in Iress on December 4, 2024 and sell it today you would lose (60.00) from holding Iress or give up 6.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Clime Investment Management  vs.  Iress

Clime Investment Man

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clime Investment Management are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clime Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Iress

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iress has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Clime Investment and Iress

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

The idea behind Clime Investment Management and Iress 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.