Correlation Between Expensify and IMPACT Silver

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

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

Diversification Opportunities for Expensify and IMPACT Silver

-0.48

Correlation Coefficient

Expensify  IMPACT Silver

Very good diversification

The 3 months correlation between Expensify and IMPACT is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and IMPACT Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPACT Silver Corp and Expensify 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 Expensify are associated (or correlated) with IMPACT Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPACT Silver Corp has no effect on the direction of Expensify i.e., Expensify and IMPACT Silver go up and down completely randomly.

Pair Corralation between Expensify and IMPACT Silver

Given the investment horizon of 90 days Expensify is expected to under-perform the IMPACT Silver. But the stock apears to be less risky and, when comparing its historical volatility, Expensify is 1.56 times less risky than IMPACT Silver. The stock trades about -0.17 of its potential returns per unit of risk. The IMPACT Silver Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  15.00  in IMPACT Silver Corp on January 20, 2024 and sell it today you would earn a total of  8.00  from holding IMPACT Silver Corp or generate 53.33% return on investment over 90 days.

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

Expensify  vs.  IMPACT Silver Corp

Expensify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expensify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

IMPACT Silver Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IMPACT Silver Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, IMPACT Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and IMPACT Silver

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

The idea behind Expensify and IMPACT Silver Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.