Correlation Between Image Protect and Protek Capital

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

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

Diversification Opportunities for Image Protect and Protek Capital

0.0

Correlation Coefficient

Image Protect  Protek Capital

Pay attention - limited upside

The 3 months correlation between Image and Protek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Image Protect and Protek Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protek Capital 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 Protek Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protek Capital has no effect on the direction of Image Protect i.e., Image Protect and Protek Capital go up and down completely randomly.

Pair Corralation between Image Protect and Protek Capital

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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Image Protect  vs.  Protek Capital

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.

Protek Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protek Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Protek Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Image Protect and Protek Capital

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

The idea behind Image Protect and Protek Capital 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.