Correlation Between IMGP DBi and IM Global

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

By analyzing existing cross correlation between iMGP DBi Managed and IM Global Partner, you can compare the effects of market volatilities on IMGP DBi and IM Global 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 IMGP DBi with a short position of IM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMGP DBi and IM Global.

Diversification Opportunities for IMGP DBi and IM Global

-0.12

Correlation Coefficient

IMGP DBi  IM Global

Good diversification

The 3 months correlation between IMGP and DBEH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding iMGP DBi Managed and IM Global Partner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Global Partner and IMGP DBi 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 iMGP DBi Managed are associated (or correlated) with IM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Global Partner has no effect on the direction of IMGP DBi i.e., IMGP DBi and IM Global go up and down completely randomly.

Pair Corralation between IMGP DBi and IM Global

Given the investment horizon of 90 days IMGP DBi is expected to generate 3.9 times less return on investment than IM Global. In addition to that, IMGP DBi is 1.56 times more volatile than IM Global Partner. It trades about 0.01 of its total potential returns per unit of risk. IM Global Partner is currently generating about 0.06 per unit of volatility. If you would invest  2,453  in IM Global Partner on October 12, 2024 and sell it today you would earn a total of  280.00  from holding IM Global Partner or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.44%
Values	Daily Returns

iMGP DBi Managed  vs.  IM Global Partner

iMGP DBi Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iMGP DBi Managed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IMGP DBi is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

IM Global Partner

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IM Global Partner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, IM Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IMGP DBi and IM Global

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

The idea behind iMGP DBi Managed and IM Global Partner 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.