Correlation Between Imaflex and Fab Form
Can any of the company-specific risk be diversified away by investing in both Imaflex and Fab Form 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 Fab Form into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imaflex and Fab Form Industries, you can compare the effects of market volatilities on Imaflex and Fab Form 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 Fab Form. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imaflex and Fab Form.
Diversification Opportunities for Imaflex and Fab Form
Very poor diversification
The 3 months correlation between Imaflex and Fab is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Imaflex and Fab Form Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fab Form 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 Fab Form. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fab Form Industries has no effect on the direction of Imaflex i.e., Imaflex and Fab Form go up and down completely randomly.
Pair Corralation between Imaflex and Fab Form
Assuming the 90 days horizon Imaflex is expected to generate 1.08 times more return on investment than Fab Form. However, Imaflex is 1.08 times more volatile than Fab Form Industries. It trades about -0.06 of its potential returns per unit of risk. Fab Form Industries is currently generating about -0.11 per unit of risk. If you would invest 141.00 in Imaflex on December 28, 2024 and sell it today you would lose (17.00) from holding Imaflex or give up 12.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Imaflex vs. Fab Form Industries
Performance |
Timeline |
Imaflex |
Fab Form Industries |
Imaflex and Fab Form Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Imaflex and Fab Form
The main advantage of trading using opposite Imaflex and Fab Form positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imaflex position performs unexpectedly, Fab Form 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 Fab Form will offset losses from the drop in Fab Form's long position.Imaflex vs. AirIQ Inc | Imaflex vs. NamSys Inc | Imaflex vs. Supremex | Imaflex vs. Atlas Engineered Products |
Fab Form vs. Atlas Engineered Products | Fab Form vs. Inventronics | Fab Form vs. Imaflex | Fab Form vs. AirIQ Inc |
Check out your portfolio center.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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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