Correlation Between Innovativ Media and Descartes Systems

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

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

Diversification Opportunities for Innovativ Media and Descartes Systems

0.0

Correlation Coefficient

Innovativ Media  Descartes Systems

Pay attention - limited upside

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

Pair Corralation between Innovativ Media and Descartes Systems

If you would invest (100.00) in Innovativ Media Group on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Innovativ Media Group 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

Innovativ Media Group  vs.  Descartes Systems Group

Innovativ Media Group

Risk-Adjusted Performance

Very Weak

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

Descartes Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Descartes Systems Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Descartes Systems is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovativ Media and Descartes Systems

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

The idea behind Innovativ Media Group and Descartes Systems Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.