Correlation Between Inpex Corp and Managed Account

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

By analyzing existing cross correlation between Inpex Corp ADR and Managed Account Series, you can compare the effects of market volatilities on Inpex Corp and Managed Account 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 Inpex Corp with a short position of Managed Account. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpex Corp and Managed Account.

Diversification Opportunities for Inpex Corp and Managed Account

0.41

Correlation Coefficient

Inpex Corp  Managed Account

Very weak diversification

The 3 months correlation between Inpex and Managed is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Inpex Corp ADR and Managed Account Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Account Series and Inpex Corp 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 Inpex Corp ADR are associated (or correlated) with Managed Account. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Account Series has no effect on the direction of Inpex Corp i.e., Inpex Corp and Managed Account go up and down completely randomly.

Pair Corralation between Inpex Corp and Managed Account

Assuming the 90 days horizon Inpex Corp is expected to generate 1.62 times less return on investment than Managed Account. In addition to that, Inpex Corp is 7.79 times more volatile than Managed Account Series. It trades about 0.01 of its total potential returns per unit of risk. Managed Account Series is currently generating about 0.15 per unit of volatility. If you would invest  895.00  in Managed Account Series on September 5, 2024 and sell it today you would earn a total of  5.00  from holding Managed Account Series or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Inpex Corp ADR  vs.  Managed Account Series

Inpex Corp ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inpex Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Inpex Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Managed Account Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Managed Account Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Managed Account is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inpex Corp and Managed Account

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

The idea behind Inpex Corp ADR and Managed Account Series 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.