Correlation Between I Mab and Monogram Orthopaedics

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

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

Diversification Opportunities for I Mab and Monogram Orthopaedics

0.05

Correlation Coefficient

I Mab  Monogram Orthopaedics

Significant diversification

The 3 months correlation between IMAB and Monogram is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding I Mab and Monogram Orthopaedics Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monogram Orthopaedics and I Mab 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 I Mab are associated (or correlated) with Monogram Orthopaedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monogram Orthopaedics has no effect on the direction of I Mab i.e., I Mab and Monogram Orthopaedics go up and down completely randomly.

Pair Corralation between I Mab and Monogram Orthopaedics

Given the investment horizon of 90 days I Mab is expected to generate 1.4 times more return on investment than Monogram Orthopaedics. However, I Mab is 1.4 times more volatile than Monogram Orthopaedics Common. It trades about 0.06 of its potential returns per unit of risk. Monogram Orthopaedics Common is currently generating about -0.06 per unit of risk. If you would invest  106.00  in I Mab on October 11, 2024 and sell it today you would earn a total of  4.00  from holding I Mab or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

I Mab  vs.  Monogram Orthopaedics Common

I Mab

Risk-Adjusted Performance

0 of 100

Very Weak

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

Monogram Orthopaedics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monogram Orthopaedics Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Monogram Orthopaedics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with I Mab and Monogram Orthopaedics

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

The idea behind I Mab and Monogram Orthopaedics Common 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.