Correlation Between Intermap Technologies and MDA

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

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

Diversification Opportunities for Intermap Technologies and MDA

0.84

Correlation Coefficient

Intermap Technologies  MDA

Very poor diversification

The 3 months correlation between Intermap and MDA is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intermap Technologies Corp and MDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDA and Intermap Technologies 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 Intermap Technologies Corp are associated (or correlated) with MDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDA has no effect on the direction of Intermap Technologies i.e., Intermap Technologies and MDA go up and down completely randomly.

Pair Corralation between Intermap Technologies and MDA

Assuming the 90 days trading horizon Intermap Technologies Corp is expected to generate 2.45 times more return on investment than MDA. However, Intermap Technologies is 2.45 times more volatile than MDA. It trades about 0.26 of its potential returns per unit of risk. MDA is currently generating about 0.27 per unit of risk. If you would invest  119.00  in Intermap Technologies Corp on October 9, 2024 and sell it today you would earn a total of  139.00  from holding Intermap Technologies Corp or generate 116.81% return on investment over 90 days.

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

Intermap Technologies Corp  vs.  MDA

Intermap Technologies

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intermap Technologies Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Intermap Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

MDA

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MDA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MDA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intermap Technologies and MDA

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

The idea behind Intermap Technologies Corp and MDA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.