Correlation Between Imaflex and Myers Industries

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

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

Diversification Opportunities for Imaflex and Myers Industries

0.44

Correlation Coefficient

Imaflex  Myers Industries

Very weak diversification

The 3 months correlation between Imaflex and Myers is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Imaflex and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries and Imaflex 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 Imaflex are associated (or correlated) with Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Imaflex i.e., Imaflex and Myers Industries go up and down completely randomly.

Pair Corralation between Imaflex and Myers Industries

Assuming the 90 days horizon Imaflex is expected to generate 1.28 times more return on investment than Myers Industries. However, Imaflex is 1.28 times more volatile than Myers Industries. It trades about 0.01 of its potential returns per unit of risk. Myers Industries is currently generating about -0.05 per unit of risk. If you would invest  110.00  in Imaflex on October 4, 2024 and sell it today you would lose (10.00) from holding Imaflex or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Imaflex  vs.  Myers Industries

Imaflex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imaflex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Imaflex and Myers Industries

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

The idea behind Imaflex and Myers 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.