Correlation Between AcadeMedia and Avis Budget
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Avis Budget 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 AcadeMedia and Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Avis Budget Group, you can compare the effects of market volatilities on AcadeMedia and Avis Budget 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 AcadeMedia with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Avis Budget.
Diversification Opportunities for AcadeMedia and Avis Budget
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AcadeMedia and Avis is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of AcadeMedia i.e., AcadeMedia and Avis Budget go up and down completely randomly.
Pair Corralation between AcadeMedia and Avis Budget
Assuming the 90 days trading horizon AcadeMedia is expected to generate 12.94 times less return on investment than Avis Budget. But when comparing it to its historical volatility, AcadeMedia AB is 1.49 times less risky than Avis Budget. It trades about 0.05 of its potential returns per unit of risk. Avis Budget Group is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 8,085 in Avis Budget Group on November 3, 2024 and sell it today you would earn a total of 1,387 from holding Avis Budget Group or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Avis Budget Group
Performance |
| Timeline |
| AcadeMedia AB |
| Avis Budget Group |
AcadeMedia and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Avis Budget
The main advantage of trading using opposite AcadeMedia and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| AcadeMedia vs. One Media iP | AcadeMedia vs. Centaur Media | AcadeMedia vs. MediaZest plc | AcadeMedia vs. Hochschild Mining plc |
| Avis Budget vs. BE Semiconductor Industries | Avis Budget vs. Fevertree Drinks Plc | Avis Budget vs. Ebro Foods | Avis Budget vs. Aptitude Software Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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