Correlation Between Intelligent Bio and Imagion Biosystems

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

By analyzing existing cross correlation between Intelligent Bio Solutions and Imagion Biosystems Limited, you can compare the effects of market volatilities on Intelligent Bio and Imagion Biosystems 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 Intelligent Bio with a short position of Imagion Biosystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelligent Bio and Imagion Biosystems.

Diversification Opportunities for Intelligent Bio and Imagion Biosystems

-0.42

Correlation Coefficient

Intelligent Bio  Imagion Biosystems

Very good diversification

The 3 months correlation between Intelligent and Imagion is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Bio Solutions and Imagion Biosystems Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imagion Biosystems and Intelligent Bio 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 Intelligent Bio Solutions are associated (or correlated) with Imagion Biosystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imagion Biosystems has no effect on the direction of Intelligent Bio i.e., Intelligent Bio and Imagion Biosystems go up and down completely randomly.

Pair Corralation between Intelligent Bio and Imagion Biosystems

Given the investment horizon of 90 days Intelligent Bio Solutions is expected to generate 0.67 times more return on investment than Imagion Biosystems. However, Intelligent Bio Solutions is 1.5 times less risky than Imagion Biosystems. It trades about 0.09 of its potential returns per unit of risk. Imagion Biosystems Limited is currently generating about -0.13 per unit of risk. If you would invest  166.00  in Intelligent Bio Solutions on December 4, 2024 and sell it today you would earn a total of  38.00  from holding Intelligent Bio Solutions or generate 22.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Intelligent Bio Solutions  vs.  Imagion Biosystems Limited

Intelligent Bio Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intelligent Bio Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Intelligent Bio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Imagion Biosystems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imagion Biosystems Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Intelligent Bio and Imagion Biosystems

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

The idea behind Intelligent Bio Solutions and Imagion Biosystems Limited 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.