Correlation Between Newage and Ilex Medical
Can any of the company-specific risk be diversified away by investing in both Newage and Ilex Medical 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 Newage and Ilex Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newage Inc and Ilex Medical, you can compare the effects of market volatilities on Newage and Ilex Medical 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 Newage with a short position of Ilex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newage and Ilex Medical.
Diversification Opportunities for Newage and Ilex Medical
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newage and Ilex is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Newage Inc and Ilex Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilex Medical and Newage 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 Newage Inc are associated (or correlated) with Ilex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilex Medical has no effect on the direction of Newage i.e., Newage and Ilex Medical go up and down completely randomly.
Pair Corralation between Newage and Ilex Medical
If you would invest 606,435 in Ilex Medical on January 19, 2024 and sell it today you would earn a total of 71,665 from holding Ilex Medical or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Newage Inc vs. Ilex Medical
Performance |
| Timeline |
| Newage Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ilex Medical |
Newage and Ilex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newage and Ilex Medical
The main advantage of trading using opposite Newage and Ilex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newage position performs unexpectedly, Ilex Medical 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 Ilex Medical will offset losses from the drop in Ilex Medical's long position.The idea behind Newage Inc and Ilex Medical 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.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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