Correlation Between Arc Funds and Infomedia
Can any of the company-specific risk be diversified away by investing in both Arc Funds 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 Arc Funds and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arc Funds and Infomedia, you can compare the effects of market volatilities on Arc Funds 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 Arc Funds with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arc Funds and Infomedia.
Diversification Opportunities for Arc Funds and Infomedia
Very weak diversification
The 3 months correlation between Arc and Infomedia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Arc Funds and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and Arc Funds 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 Arc Funds 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 Arc Funds i.e., Arc Funds and Infomedia go up and down completely randomly.
Pair Corralation between Arc Funds and Infomedia
Assuming the 90 days trading horizon Arc Funds is expected to generate 0.85 times more return on investment than Infomedia. However, Arc Funds is 1.17 times less risky than Infomedia. It trades about 0.4 of its potential returns per unit of risk. Infomedia is currently generating about 0.02 per unit of risk. If you would invest 8.70 in Arc Funds on October 20, 2024 and sell it today you would earn a total of 2.30 from holding Arc Funds or generate 26.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arc Funds vs. Infomedia
Performance |
| Timeline |
| Arc Funds |
| Infomedia |
Arc Funds and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arc Funds and Infomedia
The main advantage of trading using opposite Arc Funds and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arc Funds 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.| Arc Funds vs. Aneka Tambang Tbk | Arc Funds vs. Commonwealth Bank of | Arc Funds vs. Australia and New | Arc Funds vs. ANZ Group Holdings |
| Infomedia vs. MFF Capital Investments | Infomedia vs. Hotel Property Investments | Infomedia vs. Carlton Investments | Infomedia vs. Arc Funds |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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