Correlation Between SQUIRREL MEDIA and Adidas AG
Can any of the company-specific risk be diversified away by investing in both SQUIRREL MEDIA and Adidas AG 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 SQUIRREL MEDIA and Adidas AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SQUIRREL MEDIA SA and adidas AG, you can compare the effects of market volatilities on SQUIRREL MEDIA and Adidas AG 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 SQUIRREL MEDIA with a short position of Adidas AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SQUIRREL MEDIA and Adidas AG.
Diversification Opportunities for SQUIRREL MEDIA and Adidas AG
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SQUIRREL and Adidas is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SQUIRREL MEDIA SA and adidas AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on adidas AG and SQUIRREL MEDIA 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 SQUIRREL MEDIA SA are associated (or correlated) with Adidas AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of adidas AG has no effect on the direction of SQUIRREL MEDIA i.e., SQUIRREL MEDIA and Adidas AG go up and down completely randomly.
Pair Corralation between SQUIRREL MEDIA and Adidas AG
Assuming the 90 days horizon SQUIRREL MEDIA SA is expected to generate 2.05 times more return on investment than Adidas AG. However, SQUIRREL MEDIA is 2.05 times more volatile than adidas AG. It trades about 0.31 of its potential returns per unit of risk. adidas AG is currently generating about -0.01 per unit of risk. If you would invest 122.00 in SQUIRREL MEDIA SA on October 13, 2024 and sell it today you would earn a total of 16.00 from holding SQUIRREL MEDIA SA or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SQUIRREL MEDIA SA vs. adidas AG
Performance |
| Timeline |
| SQUIRREL MEDIA SA |
| adidas AG |
SQUIRREL MEDIA and Adidas AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SQUIRREL MEDIA and Adidas AG
The main advantage of trading using opposite SQUIRREL MEDIA and Adidas AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SQUIRREL MEDIA position performs unexpectedly, Adidas AG 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 Adidas AG will offset losses from the drop in Adidas AG's long position.| SQUIRREL MEDIA vs. Ares Management Corp | SQUIRREL MEDIA vs. Charter Communications | SQUIRREL MEDIA vs. Ribbon Communications | SQUIRREL MEDIA vs. Cairo Communication SpA |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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