Correlation Between Nova Leap and IMAC Holdings

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

By analyzing existing cross correlation between Nova Leap Health and IMAC Holdings, you can compare the effects of market volatilities on Nova Leap and IMAC Holdings 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 Nova Leap with a short position of IMAC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Leap and IMAC Holdings.

Diversification Opportunities for Nova Leap and IMAC Holdings

0.36

Correlation Coefficient

Nova Leap  IMAC Holdings

Weak diversification

The 3 months correlation between Nova and IMAC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nova Leap Health and IMAC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMAC Holdings and Nova Leap 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 Nova Leap Health are associated (or correlated) with IMAC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMAC Holdings has no effect on the direction of Nova Leap i.e., Nova Leap and IMAC Holdings go up and down completely randomly.

Pair Corralation between Nova Leap and IMAC Holdings

Assuming the 90 days horizon Nova Leap Health is expected to generate 0.23 times more return on investment than IMAC Holdings. However, Nova Leap Health is 4.37 times less risky than IMAC Holdings. It trades about -0.06 of its potential returns per unit of risk. IMAC Holdings is currently generating about -0.2 per unit of risk. If you would invest  20.00  in Nova Leap Health on December 27, 2024 and sell it today you would lose (3.00) from holding Nova Leap Health or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Nova Leap Health  vs.  IMAC Holdings

Nova Leap Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nova Leap Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

IMAC Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days IMAC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nova Leap and IMAC Holdings

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

The idea behind Nova Leap Health and IMAC Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.