Correlation Between Impact BioMedical, and Merrill Lynch

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

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

Diversification Opportunities for Impact BioMedical, and Merrill Lynch

-0.29

Correlation Coefficient

Impact BioMedical,  Merrill Lynch

Very good diversification

The 3 months correlation between Impact and Merrill is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Impact BioMedical, and Merrill Lynch Depositor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch Depositor and Impact BioMedical, 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 Impact BioMedical, are associated (or correlated) with Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch Depositor has no effect on the direction of Impact BioMedical, i.e., Impact BioMedical, and Merrill Lynch go up and down completely randomly.

Pair Corralation between Impact BioMedical, and Merrill Lynch

Considering the 90-day investment horizon Impact BioMedical, is expected to generate 7.12 times more return on investment than Merrill Lynch. However, Impact BioMedical, is 7.12 times more volatile than Merrill Lynch Depositor. It trades about 0.02 of its potential returns per unit of risk. Merrill Lynch Depositor is currently generating about -0.01 per unit of risk. If you would invest  218.00  in Impact BioMedical, on October 10, 2024 and sell it today you would lose (38.00) from holding Impact BioMedical, or give up 17.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Impact BioMedical,  vs.  Merrill Lynch Depositor

Impact BioMedical,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Impact BioMedical, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Impact BioMedical, displayed solid returns over the last few months and may actually be approaching a breakup point.

Merrill Lynch Depositor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merrill Lynch Depositor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Merrill Lynch is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Impact BioMedical, and Merrill Lynch

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

The idea behind Impact BioMedical, and Merrill Lynch Depositor 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.