Correlation Between Harrow Health and IMedia Brands

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

By analyzing existing cross correlation between Harrow Health 8625 and IMedia Brands 85, you can compare the effects of market volatilities on Harrow Health and IMedia Brands 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 Harrow Health with a short position of IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health and IMedia Brands.

Diversification Opportunities for Harrow Health and IMedia Brands

-0.52

Correlation Coefficient

Harrow Health  IMedia Brands

Excellent diversification

The 3 months correlation between Harrow and IMedia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health 8625 and IMedia Brands 85 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands 85 and Harrow Health 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 Harrow Health 8625 are associated (or correlated) with IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands 85 has no effect on the direction of Harrow Health i.e., Harrow Health and IMedia Brands go up and down completely randomly.

Pair Corralation between Harrow Health and IMedia Brands

Assuming the 90 days horizon Harrow Health 8625 is expected to generate 0.07 times more return on investment than IMedia Brands. However, Harrow Health 8625 is 15.26 times less risky than IMedia Brands. It trades about 0.07 of its potential returns per unit of risk. IMedia Brands 85 is currently generating about -0.11 per unit of risk. If you would invest  2,060  in Harrow Health 8625 on September 27, 2024 and sell it today you would earn a total of  478.60  from holding Harrow Health 8625 or generate 23.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.48%
Values	Daily Returns

Harrow Health 8625  vs.  IMedia Brands 85

Harrow Health 8625

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harrow Health 8625 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Harrow Health is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

IMedia Brands 85

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMedia Brands 85 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, IMedia Brands is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Harrow Health and IMedia Brands

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

The idea behind Harrow Health 8625 and IMedia Brands 85 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.