Correlation Between INFORMATION SVC and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and Beijing MediaLimited 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 INFORMATION SVC and Beijing MediaLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and Beijing Media, you can compare the effects of market volatilities on INFORMATION SVC and Beijing MediaLimited 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 INFORMATION SVC with a short position of Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and Beijing MediaLimited.
Diversification Opportunities for INFORMATION SVC and Beijing MediaLimited
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INFORMATION and Beijing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between INFORMATION SVC and Beijing MediaLimited
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 0.67 times more return on investment than Beijing MediaLimited. However, INFORMATION SVC GRP is 1.49 times less risky than Beijing MediaLimited. It trades about 0.09 of its potential returns per unit of risk. Beijing Media is currently generating about 0.04 per unit of risk. If you would invest 305.00 in INFORMATION SVC GRP on August 30, 2024 and sell it today you would earn a total of 39.00 from holding INFORMATION SVC GRP or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. Beijing Media
Performance |
| Timeline |
| INFORMATION SVC GRP |
| Beijing MediaLimited |
INFORMATION SVC and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and Beijing MediaLimited
The main advantage of trading using opposite INFORMATION SVC and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| INFORMATION SVC vs. Universal Display | INFORMATION SVC vs. GOLD ROAD RES | INFORMATION SVC vs. Ming Le Sports | INFORMATION SVC vs. TRAINLINE PLC LS |
| Beijing MediaLimited vs. NISSAN CHEMICAL IND | Beijing MediaLimited vs. Seven West Media | Beijing MediaLimited vs. Tencent Music Entertainment | Beijing MediaLimited vs. KINGBOARD CHEMICAL |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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