Correlation Between Intermap Technologies and Outback Goldfields

Can any of the company-specific risk be diversified away by investing in both Intermap Technologies and Outback Goldfields 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 Outback Goldfields 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 Outback Goldfields Corp, you can compare the effects of market volatilities on Intermap Technologies and Outback Goldfields 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 Outback Goldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermap Technologies and Outback Goldfields.

Diversification Opportunities for Intermap Technologies and Outback Goldfields

-0.71

Correlation Coefficient

Intermap Technologies  Outback Goldfields

Pay attention - limited upside

The 3 months correlation between Intermap and Outback is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Intermap Technologies Corp and Outback Goldfields Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outback Goldfields Corp 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 Outback Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outback Goldfields Corp has no effect on the direction of Intermap Technologies i.e., Intermap Technologies and Outback Goldfields go up and down completely randomly.

Pair Corralation between Intermap Technologies and Outback Goldfields

Assuming the 90 days trading horizon Intermap Technologies Corp is expected to generate 0.81 times more return on investment than Outback Goldfields. However, Intermap Technologies Corp is 1.23 times less risky than Outback Goldfields. It trades about 0.19 of its potential returns per unit of risk. Outback Goldfields Corp is currently generating about -0.02 per unit of risk. If you would invest  119.00  in Intermap Technologies Corp on October 11, 2024 and sell it today you would earn a total of  92.00  from holding Intermap Technologies Corp or generate 77.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Intermap Technologies Corp  vs.  Outback Goldfields Corp

Intermap Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermap Technologies Corp are ranked lower than 15 (%) 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.

Outback Goldfields Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Outback Goldfields Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Intermap Technologies and Outback Goldfields

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

The idea behind Intermap Technologies Corp and Outback Goldfields Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.