Correlation Between IMAGIN MEDICAL and NXP Semiconductors

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

By analyzing existing cross correlation between IMAGIN MEDICAL INC and NXP Semiconductors NV, you can compare the effects of market volatilities on IMAGIN MEDICAL and NXP Semiconductors 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 IMAGIN MEDICAL with a short position of NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAGIN MEDICAL and NXP Semiconductors.

Diversification Opportunities for IMAGIN MEDICAL and NXP Semiconductors

0.0

Correlation Coefficient

IMAGIN MEDICAL  NXP Semiconductors

Pay attention - limited upside

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

Pair Corralation between IMAGIN MEDICAL and NXP Semiconductors

Assuming the 90 days trading horizon IMAGIN MEDICAL INC is expected to generate 64.49 times more return on investment than NXP Semiconductors. However, IMAGIN MEDICAL is 64.49 times more volatile than NXP Semiconductors NV. It trades about 0.18 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.04 per unit of risk. If you would invest  9.54  in IMAGIN MEDICAL INC on September 16, 2024 and sell it today you would lose (9.49) from holding IMAGIN MEDICAL INC or give up 99.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

IMAGIN MEDICAL INC  vs.  NXP Semiconductors NV

IMAGIN MEDICAL INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

NXP Semiconductors

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NXP Semiconductors NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, NXP Semiconductors is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IMAGIN MEDICAL and NXP Semiconductors

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

The idea behind IMAGIN MEDICAL INC and NXP Semiconductors NV 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.