Correlation Between Immersion and AudioCodes

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

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

Diversification Opportunities for Immersion and AudioCodes

0.54

Correlation Coefficient

Immersion  AudioCodes

Very weak diversification

The 3 months correlation between Immersion and AudioCodes is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Immersion and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Immersion 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 Immersion are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Immersion i.e., Immersion and AudioCodes go up and down completely randomly.

Pair Corralation between Immersion and AudioCodes

Given the investment horizon of 90 days Immersion is expected to generate 1.55 times more return on investment than AudioCodes. However, Immersion is 1.55 times more volatile than AudioCodes. It trades about 0.03 of its potential returns per unit of risk. AudioCodes is currently generating about -0.07 per unit of risk. If you would invest  677.00  in Immersion on September 12, 2025 and sell it today you would earn a total of  19.00  from holding Immersion or generate 2.81% return on investment over 90 days.

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

Immersion  vs.  AudioCodes

Immersion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Immersion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Immersion is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

AudioCodes

Risk-Adjusted Performance

Weakest

Over the last 90 days AudioCodes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Immersion and AudioCodes

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

The idea behind Immersion and AudioCodes 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 Global Correlations module to find global opportunities by holding instruments from different markets.