Correlation Between Advance Information and Star Media
Can any of the company-specific risk be diversified away by investing in both Advance Information and Star Media 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 Advance Information and Star Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Information Marketing and Star Media Group, you can compare the effects of market volatilities on Advance Information and Star Media 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 Advance Information with a short position of Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Information and Star Media.
Diversification Opportunities for Advance Information and Star Media
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advance and Star is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Advance Information Marketing and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media Group and Advance Information 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 Advance Information Marketing are associated (or correlated) with Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of Advance Information i.e., Advance Information and Star Media go up and down completely randomly.
Pair Corralation between Advance Information and Star Media
Assuming the 90 days trading horizon Advance Information Marketing is expected to generate 4.55 times more return on investment than Star Media. However, Advance Information is 4.55 times more volatile than Star Media Group. It trades about 0.03 of its potential returns per unit of risk. Star Media Group is currently generating about -0.02 per unit of risk. If you would invest 7.00 in Advance Information Marketing on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Advance Information Marketing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Advance Information Marketing vs. Star Media Group
Performance |
| Timeline |
| Advance Information |
| Star Media Group |
Advance Information and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Information and Star Media
The main advantage of trading using opposite Advance Information and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Information position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media's long position.| Advance Information vs. Media Prima Bhd | Advance Information vs. Star Media Group | Advance Information vs. Asia Media Group |
| Star Media vs. Media Prima Bhd | Star Media vs. Asia Media Group | Star Media vs. Advance Information Marketing |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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