Correlation Between Infomedia and Ora Banda

Can any of the company-specific risk be diversified away by investing in both Infomedia and Ora Banda 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 Infomedia and Ora Banda into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infomedia and Ora Banda Mining, you can compare the effects of market volatilities on Infomedia and Ora Banda 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 Infomedia with a short position of Ora Banda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Ora Banda.

Diversification Opportunities for Infomedia and Ora Banda

-0.25

Correlation Coefficient

Infomedia  Ora Banda

Very good diversification

The 3 months correlation between Infomedia and Ora is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia and Ora Banda Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ora Banda Mining and Infomedia 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 Infomedia are associated (or correlated) with Ora Banda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ora Banda Mining has no effect on the direction of Infomedia i.e., Infomedia and Ora Banda go up and down completely randomly.

Pair Corralation between Infomedia and Ora Banda

Assuming the 90 days trading horizon Infomedia is expected to generate 8.24 times less return on investment than Ora Banda. But when comparing it to its historical volatility, Infomedia is 2.21 times less risky than Ora Banda. It trades about 0.03 of its potential returns per unit of risk. Ora Banda Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8.80  in Ora Banda Mining on September 23, 2024 and sell it today you would earn a total of  56.20  from holding Ora Banda Mining or generate 638.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Infomedia  vs.  Ora Banda Mining

Infomedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infomedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ora Banda Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ora Banda Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Ora Banda is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Infomedia and Ora Banda

The main advantage of trading using opposite Infomedia and Ora Banda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia position performs unexpectedly, Ora Banda 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 Ora Banda will offset losses from the drop in Ora Banda's long position.

The idea behind Infomedia and Ora Banda Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.