Correlation Between Converge Information and IPM Holdings

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

By analyzing existing cross correlation between Converge Information Communications and IPM Holdings, you can compare the effects of market volatilities on Converge Information and IPM Holdings 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 Converge Information with a short position of IPM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and IPM Holdings.

Diversification Opportunities for Converge Information and IPM Holdings

0.0

Correlation Coefficient

Converge Information  IPM Holdings

Pay attention - limited upside

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

Pair Corralation between Converge Information and IPM Holdings

If you would invest (100.00) in IPM Holdings on October 11, 2024 and sell it today you would earn a total of  100.00  from holding IPM Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Converge Information Communica  vs.  IPM Holdings

Converge Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Information Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Converge Information is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

IPM Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IPM Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IPM Holdings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Converge Information and IPM Holdings

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

The idea behind Converge Information Communications and IPM Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.