Correlation Between Super Micro and Integrated Media

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

By analyzing existing cross correlation between Super Micro Computer and Integrated Media Technology, you can compare the effects of market volatilities on Super Micro and Integrated Media 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 Super Micro with a short position of Integrated Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Micro and Integrated Media.

Diversification Opportunities for Super Micro and Integrated Media

0.16

Correlation Coefficient

Super Micro  Integrated Media

Average diversification

The 3 months correlation between Super and Integrated is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec and Super Micro 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 Super Micro Computer are associated (or correlated) with Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Super Micro i.e., Super Micro and Integrated Media go up and down completely randomly.

Pair Corralation between Super Micro and Integrated Media

Given the investment horizon of 90 days Super Micro is expected to generate 8.75 times less return on investment than Integrated Media. In addition to that, Super Micro is 1.14 times more volatile than Integrated Media Technology. It trades about 0.01 of its total potential returns per unit of risk. Integrated Media Technology is currently generating about 0.06 per unit of volatility. If you would invest  125.00  in Integrated Media Technology on October 20, 2024 and sell it today you would earn a total of  4.00  from holding Integrated Media Technology or generate 3.2% return on investment over 90 days.

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

Super Micro Computer  vs.  Integrated Media Technology

Super Micro Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super Micro Computer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Integrated Media Tec

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Media Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Integrated Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Super Micro and Integrated Media

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

The idea behind Super Micro Computer and Integrated Media Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.