Correlation Between Made Tech and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Made Tech and Impax Asset 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 Made Tech and Impax Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and Impax Asset Management, you can compare the effects of market volatilities on Made Tech and Impax Asset 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 Made Tech with a short position of Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Impax Asset.
Diversification Opportunities for Made Tech and Impax Asset
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Made and Impax is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Made Tech 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 Made Tech Group are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Made Tech i.e., Made Tech and Impax Asset go up and down completely randomly.
Pair Corralation between Made Tech and Impax Asset
Assuming the 90 days trading horizon Made Tech is expected to generate 1.13 times less return on investment than Impax Asset. In addition to that, Made Tech is 1.3 times more volatile than Impax Asset Management. It trades about 0.2 of its total potential returns per unit of risk. Impax Asset Management is currently generating about 0.3 per unit of volatility. If you would invest 13,550 in Impax Asset Management on April 24, 2025 and sell it today you would earn a total of 7,150 from holding Impax Asset Management or generate 52.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Made Tech Group vs. Impax Asset Management
Performance |
Timeline |
Made Tech Group |
Impax Asset Management |
Made Tech and Impax Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Made Tech and Impax Asset
The main advantage of trading using opposite Made Tech and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.Made Tech vs. Ally Financial | Made Tech vs. TT Electronics Plc | Made Tech vs. Cembra Money Bank | Made Tech vs. Host Hotels Resorts |
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Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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