Correlation Between Impinj and Meta Materials

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

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

Diversification Opportunities for Impinj and Meta Materials

-0.67

Correlation Coefficient

Impinj  Meta Materials

Excellent diversification

The 3 months correlation between Impinj and Meta is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials and Impinj 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 Impinj Inc are associated (or correlated) with Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of Impinj i.e., Impinj and Meta Materials go up and down completely randomly.

Pair Corralation between Impinj and Meta Materials

Allowing for the 90-day total investment horizon Impinj is expected to generate 150.17 times less return on investment than Meta Materials. But when comparing it to its historical volatility, Impinj Inc is 6.05 times less risky than Meta Materials. It trades about 0.01 of its potential returns per unit of risk. Meta Materials is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  191.00  in Meta Materials on January 19, 2024 and sell it today you would earn a total of  80.00  from holding Meta Materials or generate 41.88% return on investment over 90 days.

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

Impinj Inc  vs.  Meta Materials

Impinj Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impinj Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Impinj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Meta Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meta Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Impinj and Meta Materials

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

The idea behind Impinj Inc and Meta 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.