Correlation Between COG Financial and Infomedia
Can any of the company-specific risk be diversified away by investing in both COG Financial 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 COG Financial and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COG Financial Services and Infomedia, you can compare the effects of market volatilities on COG Financial 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 COG Financial with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of COG Financial and Infomedia.
Diversification Opportunities for COG Financial and Infomedia
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COG and Infomedia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding COG Financial Services and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and COG Financial 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 COG Financial Services 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 COG Financial i.e., COG Financial and Infomedia go up and down completely randomly.
Pair Corralation between COG Financial and Infomedia
Assuming the 90 days trading horizon COG Financial Services is expected to under-perform the Infomedia. In addition to that, COG Financial is 1.04 times more volatile than Infomedia. It trades about -0.04 of its total potential returns per unit of risk. Infomedia is currently generating about -0.03 per unit of volatility. If you would invest 164.00 in Infomedia on October 12, 2024 and sell it today you would lose (26.00) from holding Infomedia or give up 15.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COG Financial Services vs. Infomedia
Performance |
| Timeline |
| COG Financial Services |
| Infomedia |
COG Financial and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COG Financial and Infomedia
The main advantage of trading using opposite COG Financial and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COG Financial 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.| COG Financial vs. DY6 Metals | COG Financial vs. Perseus Mining | COG Financial vs. Retail Food Group | COG Financial vs. Aurelia Metals |
| Infomedia vs. COG Financial Services | Infomedia vs. Talisman Mining | Infomedia vs. Insignia Financial | Infomedia vs. BSP Financial Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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