Correlation Between Imed Infinity and Adgar Investments

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

By analyzing existing cross correlation between Imed Infinity Medical Limited and Adgar Investments and, you can compare the effects of market volatilities on Imed Infinity and Adgar Investments 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 Imed Infinity with a short position of Adgar Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imed Infinity and Adgar Investments.

Diversification Opportunities for Imed Infinity and Adgar Investments

-0.55

Correlation Coefficient

Imed Infinity  Adgar Investments

Excellent diversification

The 3 months correlation between Imed and Adgar is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments and Imed Infinity 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 Imed Infinity Medical Limited are associated (or correlated) with Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of Imed Infinity i.e., Imed Infinity and Adgar Investments go up and down completely randomly.

Pair Corralation between Imed Infinity and Adgar Investments

Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to under-perform the Adgar Investments. But the stock apears to be less risky and, when comparing its historical volatility, Imed Infinity Medical Limited is 1.43 times less risky than Adgar Investments. The stock trades about -0.17 of its potential returns per unit of risk. The Adgar Investments and is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  45,250  in Adgar Investments and on September 3, 2024 and sell it today you would earn a total of  4,040  from holding Adgar Investments and or generate 8.93% return on investment over 90 days.

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

Imed Infinity Medical Limited  vs.  Adgar Investments and

Imed Infinity Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imed Infinity Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Adgar Investments

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adgar Investments and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adgar Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Imed Infinity and Adgar Investments

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

The idea behind Imed Infinity Medical Limited and Adgar Investments and 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.