Correlation Between Impinj and Canaan

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

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

Diversification Opportunities for Impinj and Canaan

-0.88

Correlation Coefficient

Impinj  Canaan

Pay attention - limited upside

The 3 months correlation between Impinj and Canaan is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc and Impinj 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 Impinj Inc are associated (or correlated) with Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Impinj i.e., Impinj and Canaan go up and down completely randomly.

Pair Corralation between Impinj and Canaan

Allowing for the 90-day total investment horizon Impinj Inc is expected to under-perform the Canaan. But the stock apears to be less risky and, when comparing its historical volatility, Impinj Inc is 3.21 times less risky than Canaan. The stock trades about -0.15 of its potential returns per unit of risk. The Canaan Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Canaan Inc on September 22, 2024 and sell it today you would earn a total of  138.00  from holding Canaan Inc or generate 146.81% return on investment over 90 days.

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

Impinj Inc  vs.  Canaan Inc

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 unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Canaan Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canaan Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Canaan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Impinj and Canaan

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

The idea behind Impinj Inc and Canaan 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.

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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.