Correlation Between Examobile and Immobile

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

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

Diversification Opportunities for Examobile and Immobile

-0.21

Correlation Coefficient

Examobile  Immobile

Very good diversification

The 3 months correlation between Examobile and Immobile is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Examobile SA and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile and Examobile 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 Examobile SA are associated (or correlated) with Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of Examobile i.e., Examobile and Immobile go up and down completely randomly.

Pair Corralation between Examobile and Immobile

Assuming the 90 days trading horizon Examobile is expected to generate 7.38 times less return on investment than Immobile. But when comparing it to its historical volatility, Examobile SA is 1.5 times less risky than Immobile. It trades about 0.03 of its potential returns per unit of risk. Immobile is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  179.00  in Immobile on December 26, 2024 and sell it today you would earn a total of  55.00  from holding Immobile or generate 30.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.33%
Values	Daily Returns

Examobile SA  vs.  Immobile

Examobile SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Examobile SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Examobile is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Immobile

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Immobile are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Examobile and Immobile

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

The idea behind Examobile SA and Immobile 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.