Correlation Between Imaflex and O I

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

By analyzing existing cross correlation between Imaflex and O I Glass, you can compare the effects of market volatilities on Imaflex and O I 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 O I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imaflex and O I.

Diversification Opportunities for Imaflex and O I

0.74

Correlation Coefficient

Imaflex  O I

Poor diversification

The 3 months correlation between Imaflex and O I is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Imaflex and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass 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 O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of Imaflex i.e., Imaflex and O I go up and down completely randomly.

Pair Corralation between Imaflex and O I

Assuming the 90 days horizon Imaflex is expected to generate 0.58 times more return on investment than O I. However, Imaflex is 1.72 times less risky than O I. It trades about -0.11 of its potential returns per unit of risk. O I Glass is currently generating about -0.08 per unit of risk. If you would invest  112.00  in Imaflex on October 22, 2024 and sell it today you would lose (12.00) from holding Imaflex or give up 10.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Imaflex  vs.  O I Glass

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.

O I Glass

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days O I Glass has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Imaflex and O I

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

The idea behind Imaflex and O I Glass 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.