Correlation Between Insignia Financial and Infomedia
Can any of the company-specific risk be diversified away by investing in both Insignia 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 Insignia Financial and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Infomedia, you can compare the effects of market volatilities on Insignia 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 Insignia Financial with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Infomedia.
Diversification Opportunities for Insignia Financial and Infomedia
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insignia and Infomedia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and Insignia 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 Insignia Financial 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 Insignia Financial i.e., Insignia Financial and Infomedia go up and down completely randomly.
Pair Corralation between Insignia Financial and Infomedia
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.26 times more return on investment than Infomedia. However, Insignia Financial is 1.26 times more volatile than Infomedia. It trades about 0.1 of its potential returns per unit of risk. Infomedia is currently generating about -0.03 per unit of risk. If you would invest 248.00 in Insignia Financial on October 12, 2024 and sell it today you would earn a total of 156.00 from holding Insignia Financial or generate 62.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Infomedia
Performance |
| Timeline |
| Insignia Financial |
| Infomedia |
Insignia Financial and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Infomedia
The main advantage of trading using opposite Insignia Financial and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia 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.| Insignia Financial vs. Ecofibre | Insignia Financial vs. iShares Global Healthcare | Insignia Financial vs. Adriatic Metals Plc | Insignia Financial vs. Australian Dairy Farms |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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