Correlation Between Imax Corp and Pinterest

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

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

Diversification Opportunities for Imax Corp and Pinterest

-0.35

Correlation Coefficient

Imax Corp  Pinterest

Very good diversification

The 3 months correlation between Imax and Pinterest is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Imax Corp 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 Imax Corp are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Imax Corp i.e., Imax Corp and Pinterest go up and down completely randomly.

Pair Corralation between Imax Corp and Pinterest

Given the investment horizon of 90 days Imax Corp is expected to generate 0.8 times more return on investment than Pinterest. However, Imax Corp is 1.25 times less risky than Pinterest. It trades about 0.07 of its potential returns per unit of risk. Pinterest is currently generating about -0.02 per unit of risk. If you would invest  1,989  in Imax Corp on October 26, 2024 and sell it today you would earn a total of  378.00  from holding Imax Corp or generate 19.0% return on investment over 90 days.

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

Imax Corp  vs.  Pinterest

Imax Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Imax Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pinterest

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Imax Corp and Pinterest

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

The idea behind Imax Corp and Pinterest 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.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.