Correlation Between ARN Media and People Infrastructure
Can any of the company-specific risk be diversified away by investing in both ARN Media and People Infrastructure 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 People Infrastructure 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 People Infrastructure, you can compare the effects of market volatilities on ARN Media and People Infrastructure 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 People Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and People Infrastructure.
Diversification Opportunities for ARN Media and People Infrastructure
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ARN and People is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and People Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Infrastructure 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 People Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Infrastructure has no effect on the direction of ARN Media i.e., ARN Media and People Infrastructure go up and down completely randomly.
Pair Corralation between ARN Media and People Infrastructure
Assuming the 90 days trading horizon ARN Media is expected to generate 1.35 times less return on investment than People Infrastructure. But when comparing it to its historical volatility, ARN Media Limited is 1.27 times less risky than People Infrastructure. It trades about 0.14 of its potential returns per unit of risk. People Infrastructure is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 72.00 in People Infrastructure on September 12, 2024 and sell it today you would earn a total of 25.00 from holding People Infrastructure or generate 34.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
ARN Media Limited vs. People Infrastructure
Performance |
| Timeline |
| ARN Media Limited |
| People Infrastructure |
ARN Media and People Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and People Infrastructure
The main advantage of trading using opposite ARN Media and People Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, People Infrastructure 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 People Infrastructure will offset losses from the drop in People Infrastructure's long position.| ARN Media vs. REGAL ASIAN INVESTMENTS | ARN Media vs. National Storage REIT | ARN Media vs. Carlton Investments | ARN Media vs. ABACUS STORAGE KING |
| People Infrastructure vs. Globe Metals Mining | People Infrastructure vs. Retail Food Group | People Infrastructure vs. Talisman Mining | People Infrastructure vs. Phoslock Environmental Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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