Correlation Between Impact Shares and Impact Shares

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

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

Diversification Opportunities for Impact Shares and Impact Shares

0.63

Correlation Coefficient

Impact Shares  Impact Shares

Poor diversification

The 3 months correlation between Impact and Impact is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Impact Shares YWCA and Impact Shares NAACP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Shares NAACP and Impact Shares 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 Impact Shares YWCA are associated (or correlated) with Impact Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Shares NAACP has no effect on the direction of Impact Shares i.e., Impact Shares and Impact Shares go up and down completely randomly.

Pair Corralation between Impact Shares and Impact Shares

Given the investment horizon of 90 days Impact Shares is expected to generate 14.96 times less return on investment than Impact Shares. In addition to that, Impact Shares is 1.11 times more volatile than Impact Shares NAACP. It trades about 0.02 of its total potential returns per unit of risk. Impact Shares NAACP is currently generating about 0.27 per unit of volatility. If you would invest  3,778  in Impact Shares NAACP on March 9, 2024 and sell it today you would earn a total of  115.00  from holding Impact Shares NAACP or generate 3.04% return on investment over 90 days.

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

Impact Shares YWCA  vs.  Impact Shares NAACP

Impact Shares YWCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Shares YWCA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Impact Shares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Impact Shares NAACP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Impact Shares NAACP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Impact Shares is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Impact Shares and Impact Shares

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

The idea behind Impact Shares YWCA and Impact Shares NAACP 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.