Correlation Between METTLER TOLEDO and Impinj

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

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

Diversification Opportunities for METTLER TOLEDO and Impinj

0.63

Correlation Coefficient

METTLER TOLEDO  Impinj

Poor diversification

The 3 months correlation between METTLER and Impinj is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and Impinj go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and Impinj

Assuming the 90 days trading horizon METTLER TOLEDO INTL is expected to generate 0.56 times more return on investment than Impinj. However, METTLER TOLEDO INTL is 1.78 times less risky than Impinj. It trades about -0.05 of its potential returns per unit of risk. Impinj Inc is currently generating about -0.12 per unit of risk. If you would invest  125,400  in METTLER TOLEDO INTL on September 23, 2024 and sell it today you would lose (9,200) from holding METTLER TOLEDO INTL or give up 7.34% of portfolio value over 90 days.

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

METTLER TOLEDO INTL  vs.  Impinj Inc

METTLER TOLEDO INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days METTLER TOLEDO INTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, METTLER TOLEDO is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with METTLER TOLEDO and Impinj

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

The idea behind METTLER TOLEDO INTL and Impinj 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.