Correlation Between ARN Media and Infomedia
Can any of the company-specific risk be diversified away by investing in both ARN Media and Infomedia 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 ARN Media and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARN Media Limited and Infomedia, you can compare the effects of market volatilities on ARN Media and Infomedia 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 ARN Media with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and Infomedia.
Diversification Opportunities for ARN Media and Infomedia
Modest diversification
The 3 months correlation between ARN and Infomedia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and ARN Media 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 ARN Media Limited are associated (or correlated) with Infomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia has no effect on the direction of ARN Media i.e., ARN Media and Infomedia go up and down completely randomly.
Pair Corralation between ARN Media and Infomedia
Assuming the 90 days trading horizon ARN Media Limited is expected to under-perform the Infomedia. But the stock apears to be less risky and, when comparing its historical volatility, ARN Media Limited is 1.53 times less risky than Infomedia. The stock trades about -0.21 of its potential returns per unit of risk. The Infomedia is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Infomedia on November 3, 2024 and sell it today you would lose (7.00) from holding Infomedia or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARN Media Limited vs. Infomedia
Performance |
| Timeline |
| ARN Media Limited |
| Infomedia |
ARN Media and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and Infomedia
The main advantage of trading using opposite ARN Media and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, Infomedia 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 Infomedia will offset losses from the drop in Infomedia's long position.| ARN Media vs. Super Retail Group | ARN Media vs. Black Rock Mining | ARN Media vs. Pure Foods Tasmania | ARN Media vs. Ainsworth Game Technology |
| Infomedia vs. Dug Technology | Infomedia vs. Clime Investment Management | Infomedia vs. Spirit Telecom | Infomedia vs. K2 Asset Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |