Correlation Between Berkeley Energy and Infomedia
Can any of the company-specific risk be diversified away by investing in both Berkeley Energy 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 Berkeley Energy and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkeley Energy and Infomedia, you can compare the effects of market volatilities on Berkeley Energy 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 Berkeley Energy with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Energy and Infomedia.
Diversification Opportunities for Berkeley Energy and Infomedia
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkeley and Infomedia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Energy and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and Berkeley Energy 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 Berkeley Energy 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 Berkeley Energy i.e., Berkeley Energy and Infomedia go up and down completely randomly.
Pair Corralation between Berkeley Energy and Infomedia
Assuming the 90 days trading horizon Berkeley Energy is expected to under-perform the Infomedia. In addition to that, Berkeley Energy is 1.12 times more volatile than Infomedia. It trades about -0.08 of its total potential returns per unit of risk. Infomedia is currently generating about -0.04 per unit of volatility. If you would invest 144.00 in Infomedia on August 31, 2024 and sell it today you would lose (6.00) from holding Infomedia or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Berkeley Energy vs. Infomedia
Performance |
| Timeline |
| Berkeley Energy |
| Infomedia |
Berkeley Energy and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkeley Energy and Infomedia
The main advantage of trading using opposite Berkeley Energy and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkeley Energy 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.| Berkeley Energy vs. Sky Metals | Berkeley Energy vs. Queste Communications | Berkeley Energy vs. Stelar Metals | Berkeley Energy vs. GreenX Metals |
| Infomedia vs. Amani Gold | Infomedia vs. A1 Investments Resources | Infomedia vs. Coronado Global Resources | Infomedia vs. Hutchison Telecommunications |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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