Correlation Between Platinum Asia and Infomedia
Can any of the company-specific risk be diversified away by investing in both Platinum Asia 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 Platinum Asia and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asia Investments and Infomedia, you can compare the effects of market volatilities on Platinum Asia 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 Platinum Asia with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Infomedia.
Diversification Opportunities for Platinum Asia and Infomedia
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Platinum and Infomedia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and Platinum Asia 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 Platinum Asia Investments 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 Platinum Asia i.e., Platinum Asia and Infomedia go up and down completely randomly.
Pair Corralation between Platinum Asia and Infomedia
Assuming the 90 days trading horizon Platinum Asia Investments is expected to under-perform the Infomedia. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Asia Investments is 2.63 times less risky than Infomedia. The stock trades about -0.31 of its potential returns per unit of risk. The Infomedia is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Infomedia on August 29, 2024 and sell it today you would lose (9.00) from holding Infomedia or give up 6.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Infomedia
Performance |
| Timeline |
| Platinum Asia Investments |
| Infomedia |
Platinum Asia and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Infomedia
The main advantage of trading using opposite Platinum Asia and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia 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.| Platinum Asia vs. Stelar Metals | Platinum Asia vs. Centaurus Metals | Platinum Asia vs. Perseus Mining | Platinum Asia vs. Regal Funds Management |
| Infomedia vs. Advanced Braking Technology | Infomedia vs. Computershare | Infomedia vs. Microequities Asset Management | Infomedia vs. Carawine Resources Limited |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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