Correlation Between Infomedia Press and Palred Technologies

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

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

Diversification Opportunities for Infomedia Press and Palred Technologies

0.69

Correlation Coefficient

Infomedia Press  Palred Technologies

Poor diversification

The 3 months correlation between Infomedia and Palred is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia Press Limited and Palred Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palred Technologies and Infomedia Press 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 Press Limited are associated (or correlated) with Palred Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palred Technologies has no effect on the direction of Infomedia Press i.e., Infomedia Press and Palred Technologies go up and down completely randomly.

Pair Corralation between Infomedia Press and Palred Technologies

Assuming the 90 days trading horizon Infomedia Press Limited is expected to generate 0.91 times more return on investment than Palred Technologies. However, Infomedia Press Limited is 1.1 times less risky than Palred Technologies. It trades about 0.05 of its potential returns per unit of risk. Palred Technologies Limited is currently generating about -0.02 per unit of risk. If you would invest  460.00  in Infomedia Press Limited on October 1, 2024 and sell it today you would earn a total of  317.00  from holding Infomedia Press Limited or generate 68.91% return on investment over 90 days.

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

Infomedia Press Limited  vs.  Palred Technologies Limited

Infomedia Press

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infomedia Press Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Palred Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Palred Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Pair Trading with Infomedia Press and Palred Technologies

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

The idea behind Infomedia Press Limited and Palred Technologies Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.