Correlation Between ISign Media and Founders Metals

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

By analyzing existing cross correlation between iSign Media Solutions and Founders Metals, you can compare the effects of market volatilities on ISign Media and Founders Metals 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 ISign Media with a short position of Founders Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Founders Metals.

Diversification Opportunities for ISign Media and Founders Metals

0.0

Correlation Coefficient

ISign Media  Founders Metals

Pay attention - limited upside

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

Pair Corralation between ISign Media and Founders Metals

If you would invest (100.00) in Founders Metals on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Founders Metals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iSign Media Solutions  vs.  Founders Metals

iSign Media Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iSign Media Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ISign Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Founders Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Founders Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Founders Metals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ISign Media and Founders Metals

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

The idea behind iSign Media Solutions and Founders Metals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..