Correlation Between Alton Sports and TJ Media
Can any of the company-specific risk be diversified away by investing in both Alton Sports and TJ 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 Alton Sports and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and TJ media Co, you can compare the effects of market volatilities on Alton Sports and TJ 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 Alton Sports with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and TJ Media.
Diversification Opportunities for Alton Sports and TJ Media
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alton and 032540 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Alton Sports i.e., Alton Sports and TJ Media go up and down completely randomly.
Pair Corralation between Alton Sports and TJ Media
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the TJ Media. In addition to that, Alton Sports is 1.27 times more volatile than TJ media Co. It trades about -0.13 of its total potential returns per unit of risk. TJ media Co is currently generating about -0.07 per unit of volatility. If you would invest 752,229 in TJ media Co on September 1, 2024 and sell it today you would lose (281,729) from holding TJ media Co or give up 37.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. TJ media Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| TJ media |
Alton Sports and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and TJ Media
The main advantage of trading using opposite Alton Sports and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, TJ 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 TJ Media will offset losses from the drop in TJ Media's long position.| Alton Sports vs. LG Display | Alton Sports vs. Hyundai Motor | Alton Sports vs. Hyundai Motor Co | Alton Sports vs. Hyundai Motor Co |
| TJ Media vs. LG Display | TJ Media vs. Hyundai Motor | TJ Media vs. Hyundai Motor Co | TJ Media vs. Hyundai Motor Co |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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