Correlation Between Photomyne and Imed Infinity

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

By analyzing existing cross correlation between Photomyne and Imed Infinity Medical Limited, you can compare the effects of market volatilities on Photomyne and Imed Infinity 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 Photomyne with a short position of Imed Infinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Imed Infinity.

Diversification Opportunities for Photomyne and Imed Infinity

-0.66

Correlation Coefficient

Photomyne  Imed Infinity

Excellent diversification

The 3 months correlation between Photomyne and Imed is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Imed Infinity Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imed Infinity Medical and Photomyne 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 Photomyne are associated (or correlated) with Imed Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imed Infinity Medical has no effect on the direction of Photomyne i.e., Photomyne and Imed Infinity go up and down completely randomly.

Pair Corralation between Photomyne and Imed Infinity

Assuming the 90 days trading horizon Photomyne is expected to generate 1.08 times more return on investment than Imed Infinity. However, Photomyne is 1.08 times more volatile than Imed Infinity Medical Limited. It trades about 0.33 of its potential returns per unit of risk. Imed Infinity Medical Limited is currently generating about -0.17 per unit of risk. If you would invest  234,200  in Photomyne on September 4, 2024 and sell it today you would earn a total of  46,000  from holding Photomyne or generate 19.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.83%
Values	Daily Returns

Photomyne  vs.  Imed Infinity Medical Limited

Photomyne

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Photomyne are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Photomyne sustained solid returns over the last few months and may actually be approaching a breakup point.

Imed Infinity Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imed Infinity Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Photomyne and Imed Infinity

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

The idea behind Photomyne and Imed Infinity Medical Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.