Correlation Between IDEX Metals and Advent Wireless

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

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

Diversification Opportunities for IDEX Metals and Advent Wireless

-0.15

Correlation Coefficient

IDEX Metals  Advent Wireless

Good diversification

The 3 months correlation between IDEX and Advent is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding IDEX Metals Corp and Advent Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Wireless and IDEX Metals 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 IDEX Metals Corp are associated (or correlated) with Advent Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Wireless has no effect on the direction of IDEX Metals i.e., IDEX Metals and Advent Wireless go up and down completely randomly.

Pair Corralation between IDEX Metals and Advent Wireless

Assuming the 90 days trading horizon IDEX Metals Corp is expected to under-perform the Advent Wireless. In addition to that, IDEX Metals is 1.35 times more volatile than Advent Wireless. It trades about -0.07 of its total potential returns per unit of risk. Advent Wireless is currently generating about -0.07 per unit of volatility. If you would invest  65.00  in Advent Wireless on April 8, 2025 and sell it today you would lose (9.00) from holding Advent Wireless or give up 13.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.26%
Values	Daily Returns

IDEX Metals Corp  vs.  Advent Wireless

IDEX Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with IDEX Metals and Advent Wireless

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

The idea behind IDEX Metals Corp and Advent Wireless 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.