Correlation Between AcadeMedia and Admiral Group
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Admiral Group 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 Admiral Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Admiral Group PLC, you can compare the effects of market volatilities on AcadeMedia and Admiral Group 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 Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Admiral Group.
Diversification Opportunities for AcadeMedia and Admiral Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AcadeMedia and Admiral is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC 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 Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of AcadeMedia i.e., AcadeMedia and Admiral Group go up and down completely randomly.
Pair Corralation between AcadeMedia and Admiral Group
Assuming the 90 days trading horizon AcadeMedia AB is expected to under-perform the Admiral Group. But the stock apears to be less risky and, when comparing its historical volatility, AcadeMedia AB is 1.28 times less risky than Admiral Group. The stock trades about -0.24 of its potential returns per unit of risk. The Admiral Group PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 256,300 in Admiral Group PLC on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Admiral Group PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Admiral Group PLC
Performance |
| Timeline |
| AcadeMedia AB |
| Admiral Group PLC |
AcadeMedia and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Admiral Group
The main advantage of trading using opposite AcadeMedia and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| AcadeMedia vs. Molson Coors Beverage | AcadeMedia vs. Charter Communications Cl | AcadeMedia vs. Team Internet Group | AcadeMedia vs. bet at home AG |
| Admiral Group vs. Futura Medical | Admiral Group vs. Cellnex Telecom SA | Admiral Group vs. Zegona Communications Plc | Admiral Group vs. AcadeMedia AB |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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