Correlation Between NeoMedia Technologies and Image Protect

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

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

Diversification Opportunities for NeoMedia Technologies and Image Protect

0.0

Correlation Coefficient

NeoMedia Technologies  Image Protect

Pay attention - limited upside

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

Pair Corralation between NeoMedia Technologies and Image Protect

If you would invest  0.02  in Image Protect on December 29, 2024 and sell it today you would lose (0.01) from holding Image Protect or give up 50.0% of portfolio value over 90 days.

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

NeoMedia Technologies  vs.  Image Protect

NeoMedia Technologies

Risk-Adjusted Performance

Very Weak

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

Image Protect

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Image Protect are ranked lower than 16 (%) 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.

Pair Trading with NeoMedia Technologies and Image Protect

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

The idea behind NeoMedia Technologies and Image Protect 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.