Correlation Between Impinj and Wialan Technologies

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

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

Diversification Opportunities for Impinj and Wialan Technologies

0.76

Correlation Coefficient

Impinj  Wialan Technologies

Poor diversification

The 3 months correlation between Impinj and Wialan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Wialan Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wialan Technologies 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 Wialan Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wialan Technologies has no effect on the direction of Impinj i.e., Impinj and Wialan Technologies go up and down completely randomly.

Pair Corralation between Impinj and Wialan Technologies

Allowing for the 90-day total investment horizon Impinj Inc is expected to generate 0.22 times more return on investment than Wialan Technologies. However, Impinj Inc is 4.51 times less risky than Wialan Technologies. It trades about -0.04 of its potential returns per unit of risk. Wialan Technologies is currently generating about -0.08 per unit of risk. If you would invest  19,291  in Impinj Inc on September 5, 2024 and sell it today you would lose (470.00) from holding Impinj Inc or give up 2.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Impinj Inc  vs.  Wialan Technologies

Impinj Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Impinj Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Impinj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Wialan Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wialan Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Wialan Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Impinj and Wialan Technologies

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

The idea behind Impinj Inc and Wialan Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..