Correlation Between Whitehaven Coal and Infomedia
Can any of the company-specific risk be diversified away by investing in both Whitehaven Coal 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 Whitehaven Coal and Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitehaven Coal and Infomedia, you can compare the effects of market volatilities on Whitehaven Coal 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 Whitehaven Coal with a short position of Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitehaven Coal and Infomedia.
Diversification Opportunities for Whitehaven Coal and Infomedia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Whitehaven and Infomedia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Whitehaven Coal and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia and Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal i.e., Whitehaven Coal and Infomedia go up and down completely randomly.
Pair Corralation between Whitehaven Coal and Infomedia
Assuming the 90 days trading horizon Whitehaven Coal is expected to generate 0.47 times more return on investment than Infomedia. However, Whitehaven Coal is 2.12 times less risky than Infomedia. It trades about -0.11 of its potential returns per unit of risk. Infomedia is currently generating about -0.07 per unit of risk. If you would invest 699.00 in Whitehaven Coal on August 28, 2024 and sell it today you would lose (29.00) from holding Whitehaven Coal or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whitehaven Coal vs. Infomedia
Performance |
| Timeline |
| Whitehaven Coal |
| Infomedia |
Whitehaven Coal and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitehaven Coal and Infomedia
The main advantage of trading using opposite Whitehaven Coal and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitehaven Coal 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.| Whitehaven Coal vs. Infomedia | Whitehaven Coal vs. Retail Food Group | Whitehaven Coal vs. Queste Communications | Whitehaven Coal vs. Seven West Media |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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