Correlation Between Infrax Systems and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both Infrax Systems and Armada Mercantile 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 Infrax Systems and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infrax Systems and Armada Mercantile, you can compare the effects of market volatilities on Infrax Systems and Armada Mercantile 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 Infrax Systems with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrax Systems and Armada Mercantile.
Diversification Opportunities for Infrax Systems and Armada Mercantile
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Infrax and Armada is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Infrax Systems and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Infrax Systems 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 Infrax Systems are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of Infrax Systems i.e., Infrax Systems and Armada Mercantile go up and down completely randomly.
Pair Corralation between Infrax Systems and Armada Mercantile
Given the investment horizon of 90 days Infrax Systems is expected to generate 2.39 times more return on investment than Armada Mercantile. However, Infrax Systems is 2.39 times more volatile than Armada Mercantile. It trades about 0.03 of its potential returns per unit of risk. Armada Mercantile is currently generating about -0.07 per unit of risk. If you would invest 0.06 in Infrax Systems on August 29, 2024 and sell it today you would lose (0.01) from holding Infrax Systems or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infrax Systems vs. Armada Mercantile
Performance |
| Timeline |
| Infrax Systems |
| Armada Mercantile |
Infrax Systems and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infrax Systems and Armada Mercantile
The main advantage of trading using opposite Infrax Systems and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrax Systems position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.| Infrax Systems vs. SPENN Technology AS | Infrax Systems vs. OFX Group Ltd | Infrax Systems vs. APAC Resources Limited | Infrax Systems vs. Pinetree Capital |
| Armada Mercantile vs. SPENN Technology AS | Armada Mercantile vs. OFX Group Ltd | Armada Mercantile vs. APAC Resources Limited | Armada Mercantile vs. Cypherpunk Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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