Correlation Between Netmedia Group and Innelec Multimedia
Can any of the company-specific risk be diversified away by investing in both Netmedia Group and Innelec Multimedia 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 Netmedia Group and Innelec Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netmedia Group SA and Innelec Multimedia, you can compare the effects of market volatilities on Netmedia Group and Innelec Multimedia 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 Netmedia Group with a short position of Innelec Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmedia Group and Innelec Multimedia.
Diversification Opportunities for Netmedia Group and Innelec Multimedia
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netmedia and Innelec is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Netmedia Group SA and Innelec Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innelec Multimedia and Netmedia Group 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 Netmedia Group SA are associated (or correlated) with Innelec Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innelec Multimedia has no effect on the direction of Netmedia Group i.e., Netmedia Group and Innelec Multimedia go up and down completely randomly.
Pair Corralation between Netmedia Group and Innelec Multimedia
Assuming the 90 days trading horizon Netmedia Group SA is expected to under-perform the Innelec Multimedia. In addition to that, Netmedia Group is 1.42 times more volatile than Innelec Multimedia. It trades about -0.05 of its total potential returns per unit of risk. Innelec Multimedia is currently generating about 0.0 per unit of volatility. If you would invest 483.00 in Innelec Multimedia on November 1, 2024 and sell it today you would lose (148.00) from holding Innelec Multimedia or give up 30.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmedia Group SA vs. Innelec Multimedia
Performance |
| Timeline |
| Netmedia Group SA |
| Innelec Multimedia |
Netmedia Group and Innelec Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmedia Group and Innelec Multimedia
The main advantage of trading using opposite Netmedia Group and Innelec Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmedia Group position performs unexpectedly, Innelec Multimedia 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 Innelec Multimedia will offset losses from the drop in Innelec Multimedia's long position.| Netmedia Group vs. FNP Technologies SA | Netmedia Group vs. Linedata Services SA | Netmedia Group vs. Jacquet Metal Service | Netmedia Group vs. Hitechpros |
| Innelec Multimedia vs. Lacroix Group SA | Innelec Multimedia vs. Damartex | Innelec Multimedia vs. BigBen Interactive |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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