Correlation Between CIMG and Above Food

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

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

Diversification Opportunities for CIMG and Above Food

0.1

Correlation Coefficient

CIMG  Above Food

Average diversification

The 3 months correlation between CIMG and Above is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CIMG Inc and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and CIMG 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 CIMG Inc are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of CIMG i.e., CIMG and Above Food go up and down completely randomly.

Pair Corralation between CIMG and Above Food

Considering the 90-day investment horizon CIMG Inc is expected to generate 2.28 times more return on investment than Above Food. However, CIMG is 2.28 times more volatile than Above Food Ingredients. It trades about 0.08 of its potential returns per unit of risk. Above Food Ingredients is currently generating about 0.07 per unit of risk. If you would invest  160.00  in CIMG Inc on September 30, 2024 and sell it today you would lose (77.00) from holding CIMG Inc or give up 48.12% of portfolio value over 90 days.

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

CIMG Inc  vs.  Above Food Ingredients

CIMG Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIMG Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, CIMG reported solid returns over the last few months and may actually be approaching a breakup point.

Above Food Ingredients

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Above Food Ingredients are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Above Food showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIMG and Above Food

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

The idea behind CIMG Inc and Above Food Ingredients 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.