Correlation Between Brompton Energy and Intermap Technologies

Can any of the company-specific risk be diversified away by investing in both Brompton Energy and Intermap Technologies 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 Brompton Energy and Intermap Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brompton Energy Split and Intermap Technologies Corp, you can compare the effects of market volatilities on Brompton Energy and Intermap Technologies 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 Brompton Energy with a short position of Intermap Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Energy and Intermap Technologies.

Diversification Opportunities for Brompton Energy and Intermap Technologies

0.92

Correlation Coefficient

Brompton Energy  Intermap Technologies

Almost no diversification

The 3 months correlation between Brompton and Intermap is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Energy Split and Intermap Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermap Technologies and Brompton Energy 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 Brompton Energy Split are associated (or correlated) with Intermap Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermap Technologies has no effect on the direction of Brompton Energy i.e., Brompton Energy and Intermap Technologies go up and down completely randomly.

Pair Corralation between Brompton Energy and Intermap Technologies

Assuming the 90 days trading horizon Brompton Energy Split is expected to under-perform the Intermap Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Brompton Energy Split is 2.14 times less risky than Intermap Technologies. The stock trades about -0.06 of its potential returns per unit of risk. The Intermap Technologies Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  171.00  in Intermap Technologies Corp on September 23, 2024 and sell it today you would earn a total of  55.00  from holding Intermap Technologies Corp or generate 32.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Brompton Energy Split  vs.  Intermap Technologies Corp

Brompton Energy Split

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Energy Split are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Intermap Technologies

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intermap Technologies Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Intermap Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brompton Energy and Intermap Technologies

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

The idea behind Brompton Energy Split and Intermap Technologies Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.