Correlation Between Impax Asset and Morgan Advanced

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

By analyzing existing cross correlation between Impax Asset Management and Morgan Advanced Materials, you can compare the effects of market volatilities on Impax Asset and Morgan Advanced 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 Impax Asset with a short position of Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Morgan Advanced.

Diversification Opportunities for Impax Asset and Morgan Advanced

0.94

Correlation Coefficient

Impax Asset  Morgan Advanced

Almost no diversification

The 3 months correlation between Impax and Morgan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials and Impax Asset 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 Impax Asset Management are associated (or correlated) with Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Impax Asset i.e., Impax Asset and Morgan Advanced go up and down completely randomly.

Pair Corralation between Impax Asset and Morgan Advanced

Assuming the 90 days trading horizon Impax Asset Management is expected to generate 1.33 times more return on investment than Morgan Advanced. However, Impax Asset is 1.33 times more volatile than Morgan Advanced Materials. It trades about 0.3 of its potential returns per unit of risk. Morgan Advanced Materials is currently generating about 0.21 per unit of risk. If you would invest  13,531  in Impax Asset Management on April 20, 2025 and sell it today you would earn a total of  7,169  from holding Impax Asset Management or generate 52.98% return on investment over 90 days.

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

Impax Asset Management  vs.  Morgan Advanced Materials

Impax Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Impax Asset Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Impax Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Morgan Advanced Materials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Advanced Materials are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Morgan Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Impax Asset and Morgan Advanced

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

The idea behind Impax Asset Management and Morgan Advanced Materials 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.