Correlation Between Image Protect and Bowmo

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

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

Diversification Opportunities for Image Protect and Bowmo

0.38

Correlation Coefficient

Image Protect  Bowmo

Weak diversification

The 3 months correlation between Image and Bowmo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Image Protect and Bowmo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowmo Inc and Image Protect 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 Image Protect are associated (or correlated) with Bowmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowmo Inc has no effect on the direction of Image Protect i.e., Image Protect and Bowmo go up and down completely randomly.

Pair Corralation between Image Protect and Bowmo

Given the investment horizon of 90 days Image Protect is expected to generate 3.21 times more return on investment than Bowmo. However, Image Protect is 3.21 times more volatile than Bowmo Inc. It trades about 0.18 of its potential returns per unit of risk. Bowmo Inc is currently generating about 0.22 per unit of risk. If you would invest  0.01  in Image Protect on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Image Protect or generate 0.0% return on investment over 90 days.

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

Image Protect  vs.  Bowmo Inc

Image Protect

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Image Protect are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Image Protect disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bowmo Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bowmo Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Bowmo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Image Protect and Bowmo

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

The idea behind Image Protect and Bowmo Inc 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.