Correlation Between Impact BioMedical, and Toray Industries

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

By analyzing existing cross correlation between Impact BioMedical, and Toray Industries, you can compare the effects of market volatilities on Impact BioMedical, and Toray Industries 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 Toray Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impact BioMedical, and Toray Industries.

Diversification Opportunities for Impact BioMedical, and Toray Industries

-0.59

Correlation Coefficient

Impact BioMedical,  Toray Industries

Excellent diversification

The 3 months correlation between Impact and Toray is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Impact BioMedical, and Toray Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toray Industries 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 Toray Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toray Industries has no effect on the direction of Impact BioMedical, i.e., Impact BioMedical, and Toray Industries go up and down completely randomly.

Pair Corralation between Impact BioMedical, and Toray Industries

Considering the 90-day investment horizon Impact BioMedical, is expected to generate 43.25 times more return on investment than Toray Industries. However, Impact BioMedical, is 43.25 times more volatile than Toray Industries. It trades about 0.14 of its potential returns per unit of risk. Toray Industries is currently generating about 0.12 per unit of risk. If you would invest  144.00  in Impact BioMedical, on December 22, 2024 and sell it today you would earn a total of  352.00  from holding Impact BioMedical, or generate 244.44% return on investment over 90 days.

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

Impact BioMedical,  vs.  Toray Industries

Impact BioMedical,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impact BioMedical, are ranked lower than 11 (%) 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.

Toray Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Toray Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Toray Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Impact BioMedical, and Toray Industries

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

The idea behind Impact BioMedical, and Toray Industries 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.