Correlation Between Atresmedia and First
Can any of the company-specific risk be diversified away by investing in both Atresmedia and First 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 Atresmedia and First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atresmedia and First Class Metals, you can compare the effects of market volatilities on Atresmedia and First 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 Atresmedia with a short position of First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atresmedia and First.
Diversification Opportunities for Atresmedia and First
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Atresmedia and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Atresmedia and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class Metals and Atresmedia 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 Atresmedia are associated (or correlated) with First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Atresmedia i.e., Atresmedia and First go up and down completely randomly.
Pair Corralation between Atresmedia and First
Assuming the 90 days trading horizon Atresmedia is expected to under-perform the First. But the stock apears to be less risky and, when comparing its historical volatility, Atresmedia is 3.05 times less risky than First. The stock trades about -0.03 of its potential returns per unit of risk. The First Class Metals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 170.00 in First Class Metals on November 1, 2024 and sell it today you would earn a total of 10.00 from holding First Class Metals or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atresmedia vs. First Class Metals
Performance |
| Timeline |
| Atresmedia |
| First Class Metals |
Atresmedia and First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atresmedia and First
The main advantage of trading using opposite Atresmedia and First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atresmedia position performs unexpectedly, First 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 First will offset losses from the drop in First's long position.| Atresmedia vs. Leroy Seafood Group | Atresmedia vs. Premier Foods PLC | Atresmedia vs. Edita Food Industries | Atresmedia vs. Gaztransport et Technigaz |
| First vs. Empire Metals Limited | First vs. Atresmedia | First vs. Prosiebensat 1 Media | First vs. Silvercorp Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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