Correlation Between Inventis and PM Capital
Can any of the company-specific risk be diversified away by investing in both Inventis and PM 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 Inventis and PM Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventis and PM Capital Global, you can compare the effects of market volatilities on Inventis and PM 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 Inventis with a short position of PM Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventis and PM Capital.
Diversification Opportunities for Inventis and PM Capital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inventis and PGF is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Inventis and PM Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PM Capital Global and Inventis 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 Inventis are associated (or correlated) with PM Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PM Capital Global has no effect on the direction of Inventis i.e., Inventis and PM Capital go up and down completely randomly.
Pair Corralation between Inventis and PM Capital
Assuming the 90 days trading horizon Inventis is expected to generate 2.03 times more return on investment than PM Capital. However, Inventis is 2.03 times more volatile than PM Capital Global. It trades about 0.01 of its potential returns per unit of risk. PM Capital Global is currently generating about -0.15 per unit of risk. If you would invest 2.50 in Inventis on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Inventis or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventis vs. PM Capital Global
Performance |
| Timeline |
| Inventis |
| PM Capital Global |
Inventis and PM Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventis and PM Capital
The main advantage of trading using opposite Inventis and PM Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventis position performs unexpectedly, PM 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 PM Capital will offset losses from the drop in PM Capital's long position.| Inventis vs. Truscott Mining Corp | Inventis vs. Clime Investment Management | Inventis vs. Premier Investments | Inventis vs. Sandon Capital Investments |
| PM Capital vs. WiseTech Global Limited | PM Capital vs. Neurotech International | PM Capital vs. Carnegie Clean Energy | PM Capital vs. Genetic Technologies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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