Correlation Between IMedia Brands and Polished

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

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

Diversification Opportunities for IMedia Brands and Polished

0.62

Correlation Coefficient

IMedia Brands  Polished

Poor diversification

The 3 months correlation between IMedia and Polished is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands and Polished in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polished and IMedia Brands 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 IMedia Brands are associated (or correlated) with Polished. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polished has no effect on the direction of IMedia Brands i.e., IMedia Brands and Polished go up and down completely randomly.

Pair Corralation between IMedia Brands and Polished

If you would invest  57.00  in Polished on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Polished or generate 0.0% return on investment over 90 days.

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

IMedia Brands  vs.  Polished

IMedia Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMedia Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, IMedia Brands is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Polished

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polished has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Polished is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IMedia Brands and Polished

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

The idea behind IMedia Brands and Polished 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.