Correlation Between Infomedia and Wam Capital
Can any of the company-specific risk be diversified away by investing in both Infomedia and Wam Capital 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 Infomedia and Wam Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infomedia and Wam Capital, you can compare the effects of market volatilities on Infomedia and Wam Capital 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 Infomedia with a short position of Wam Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Wam Capital.
Diversification Opportunities for Infomedia and Wam Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Infomedia and Wam is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia and Wam Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wam Capital and Infomedia 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 Infomedia are associated (or correlated) with Wam Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wam Capital has no effect on the direction of Infomedia i.e., Infomedia and Wam Capital go up and down completely randomly.
Pair Corralation between Infomedia and Wam Capital
Assuming the 90 days trading horizon Infomedia is expected to under-perform the Wam Capital. In addition to that, Infomedia is 4.68 times more volatile than Wam Capital. It trades about -0.14 of its total potential returns per unit of risk. Wam Capital is currently generating about 0.14 per unit of volatility. If you would invest 157.00 in Wam Capital on November 1, 2024 and sell it today you would earn a total of 3.00 from holding Wam Capital or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Infomedia vs. Wam Capital
Performance |
| Timeline |
| Infomedia |
| Wam Capital |
Infomedia and Wam Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infomedia and Wam Capital
The main advantage of trading using opposite Infomedia and Wam Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia position performs unexpectedly, Wam Capital 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 Wam Capital will offset losses from the drop in Wam Capital's long position.| Infomedia vs. Charter Hall Education | Infomedia vs. Medibank Private | Infomedia vs. Group 6 Metals | Infomedia vs. Perpetual Credit Income |
| Wam Capital vs. Infomedia | Wam Capital vs. EROAD | Wam Capital vs. COAST ENTERTAINMENT HOLDINGS | Wam Capital vs. Truscott Mining Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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