Correlation Between Ram On and Imed Infinity

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

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

Diversification Opportunities for Ram On and Imed Infinity

0.64

Correlation Coefficient

Ram On  Imed Infinity

Poor diversification

The 3 months correlation between Ram and Imed is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ram On Investments and 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 Ram On 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 Ram On Investments and 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 Ram On i.e., Ram On and Imed Infinity go up and down completely randomly.

Pair Corralation between Ram On and Imed Infinity

Assuming the 90 days trading horizon Ram On Investments and is expected to generate 0.38 times more return on investment than Imed Infinity. However, Ram On Investments and is 2.66 times less risky than Imed Infinity. It trades about -0.07 of its potential returns per unit of risk. Imed Infinity Medical Limited is currently generating about -0.23 per unit of risk. If you would invest  154,400  in Ram On Investments and on December 28, 2024 and sell it today you would lose (12,400) from holding Ram On Investments and or give up 8.03% of portfolio value over 90 days.

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

Ram On Investments and  vs.  Imed Infinity Medical Limited

Ram On Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ram On Investments and 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.

Imed Infinity Medical

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ram On and Imed Infinity

The main advantage of trading using opposite Ram On and Imed Infinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ram On 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 Ram On Investments and 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.