Correlation Between Enter Air and IMC SA

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

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

Diversification Opportunities for Enter Air and IMC SA

-0.85

Correlation Coefficient

Enter Air  IMC SA

Pay attention - limited upside

The 3 months correlation between Enter and IMC is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and IMC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMC SA and Enter Air 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 Enter Air SA are associated (or correlated) with IMC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMC SA has no effect on the direction of Enter Air i.e., Enter Air and IMC SA go up and down completely randomly.

Pair Corralation between Enter Air and IMC SA

Assuming the 90 days trading horizon Enter Air SA is expected to under-perform the IMC SA. But the stock apears to be less risky and, when comparing its historical volatility, Enter Air SA is 1.91 times less risky than IMC SA. The stock trades about -0.04 of its potential returns per unit of risk. The IMC SA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,640  in IMC SA on October 23, 2024 and sell it today you would earn a total of  180.00  from holding IMC SA or generate 10.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

Enter Air SA  vs.  IMC SA

Enter Air SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enter Air SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

IMC SA

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IMC SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IMC SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enter Air and IMC SA

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

The idea behind Enter Air SA and IMC SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.