Correlation Between Imagion Biosystems and Imd Companies

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

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

Diversification Opportunities for Imagion Biosystems and Imd Companies

0.68

Correlation Coefficient

Imagion Biosystems  Imd Companies

Poor diversification

The 3 months correlation between Imagion and Imd is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Imagion Biosystems Limited and Imd Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imd Companies and Imagion Biosystems 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 Imagion Biosystems Limited are associated (or correlated) with Imd Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imd Companies has no effect on the direction of Imagion Biosystems i.e., Imagion Biosystems and Imd Companies go up and down completely randomly.

Pair Corralation between Imagion Biosystems and Imd Companies

Assuming the 90 days horizon Imagion Biosystems Limited is expected to under-perform the Imd Companies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Imagion Biosystems Limited is 1.4 times less risky than Imd Companies. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Imd Companies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  0.17  in Imd Companies on December 27, 2024 and sell it today you would lose (0.07) from holding Imd Companies or give up 41.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Imagion Biosystems Limited  vs.  Imd Companies

Imagion Biosystems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imagion Biosystems Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Imd Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imd Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Imagion Biosystems and Imd Companies

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

The idea behind Imagion Biosystems Limited and Imd Companies 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.