Correlation Between Infomedia and Zoom2u Technologies
Can any of the company-specific risk be diversified away by investing in both Infomedia and Zoom2u Technologies 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 Zoom2u Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infomedia and Zoom2u Technologies, you can compare the effects of market volatilities on Infomedia and Zoom2u Technologies 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 Zoom2u Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Zoom2u Technologies.
Diversification Opportunities for Infomedia and Zoom2u Technologies
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Infomedia and Zoom2u is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia and Zoom2u Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom2u Technologies 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 Zoom2u Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom2u Technologies has no effect on the direction of Infomedia i.e., Infomedia and Zoom2u Technologies go up and down completely randomly.
Pair Corralation between Infomedia and Zoom2u Technologies
Assuming the 90 days trading horizon Infomedia is expected to under-perform the Zoom2u Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Infomedia is 1.36 times less risky than Zoom2u Technologies. The stock trades about -0.03 of its potential returns per unit of risk. The Zoom2u Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Zoom2u Technologies on August 31, 2024 and sell it today you would lose (0.30) from holding Zoom2u Technologies or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infomedia vs. Zoom2u Technologies
Performance |
| Timeline |
| Infomedia |
| Zoom2u Technologies |
Infomedia and Zoom2u Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infomedia and Zoom2u Technologies
The main advantage of trading using opposite Infomedia and Zoom2u Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia position performs unexpectedly, Zoom2u Technologies 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 Zoom2u Technologies will offset losses from the drop in Zoom2u Technologies' long position.| Infomedia vs. Amani Gold | Infomedia vs. A1 Investments Resources | Infomedia vs. Coronado Global Resources | Infomedia vs. Hutchison Telecommunications |
| Zoom2u Technologies vs. Amani Gold | Zoom2u Technologies vs. A1 Investments Resources | Zoom2u Technologies vs. Coronado Global Resources | Zoom2u Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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