Correlation Between AcadeMedia and Foresight Group
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Foresight 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 Foresight 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 Foresight Group Holdings, you can compare the effects of market volatilities on AcadeMedia and Foresight 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 Foresight Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Foresight Group.
Diversification Opportunities for AcadeMedia and Foresight Group
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AcadeMedia and Foresight is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Foresight Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Group Holdings 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 Foresight Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Group Holdings has no effect on the direction of AcadeMedia i.e., AcadeMedia and Foresight Group go up and down completely randomly.
Pair Corralation between AcadeMedia and Foresight Group
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.55 times more return on investment than Foresight Group. However, AcadeMedia AB is 1.83 times less risky than Foresight Group. It trades about 0.08 of its potential returns per unit of risk. Foresight Group Holdings is currently generating about -0.18 per unit of risk. If you would invest 6,615 in AcadeMedia AB on October 25, 2024 and sell it today you would earn a total of 100.00 from holding AcadeMedia AB or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Foresight Group Holdings
Performance |
| Timeline |
| AcadeMedia AB |
| Foresight Group Holdings |
AcadeMedia and Foresight Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Foresight Group
The main advantage of trading using opposite AcadeMedia and Foresight Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Foresight 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 Foresight Group will offset losses from the drop in Foresight Group's long position.| AcadeMedia vs. Toyota Motor Corp | AcadeMedia vs. SoftBank Group Corp | AcadeMedia vs. OTP Bank Nyrt | AcadeMedia vs. ONEOK Inc |
| Foresight Group vs. International Biotechnology Trust | Foresight Group vs. Verizon Communications | Foresight Group vs. Axway Software SA | Foresight Group vs. Telecom Italia SpA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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