Correlation Between AcadeMedia and Centaur Media
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Centaur 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 AcadeMedia and Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Centaur Media, you can compare the effects of market volatilities on AcadeMedia and Centaur 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 AcadeMedia with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Centaur Media.
Diversification Opportunities for AcadeMedia and Centaur Media
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AcadeMedia and Centaur is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of AcadeMedia i.e., AcadeMedia and Centaur Media go up and down completely randomly.
Pair Corralation between AcadeMedia and Centaur Media
Assuming the 90 days trading horizon AcadeMedia is expected to generate 20.48 times less return on investment than Centaur Media. But when comparing it to its historical volatility, AcadeMedia AB is 3.76 times less risky than Centaur Media. It trades about 0.03 of its potential returns per unit of risk. Centaur Media is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Centaur Media on November 5, 2024 and sell it today you would earn a total of 400.00 from holding Centaur Media or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Centaur Media
Performance |
| Timeline |
| AcadeMedia AB |
| Centaur Media |
AcadeMedia and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Centaur Media
The main advantage of trading using opposite AcadeMedia and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Centaur 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| AcadeMedia vs. Systemair AB | AcadeMedia vs. Air Products Chemicals | AcadeMedia vs. Ryanair Holdings plc | AcadeMedia vs. Pentair PLC |
| Centaur Media vs. Spirent Communications plc | Centaur Media vs. Batm Advanced Communications | Centaur Media vs. Iron Mountain | Centaur Media vs. Symphony Environmental Technologies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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