Correlation Between ARN Media and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both ARN Media and Cooper Metals 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 ARN Media and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARN Media Limited and Cooper Metals, you can compare the effects of market volatilities on ARN Media and Cooper Metals 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 ARN Media with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and Cooper Metals.
Diversification Opportunities for ARN Media and Cooper Metals
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ARN and Cooper is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and ARN Media 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 ARN Media Limited are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of ARN Media i.e., ARN Media and Cooper Metals go up and down completely randomly.
Pair Corralation between ARN Media and Cooper Metals
Assuming the 90 days trading horizon ARN Media Limited is expected to generate 0.35 times more return on investment than Cooper Metals. However, ARN Media Limited is 2.85 times less risky than Cooper Metals. It trades about 0.0 of its potential returns per unit of risk. Cooper Metals is currently generating about 0.0 per unit of risk. If you would invest 86.00 in ARN Media Limited on September 4, 2024 and sell it today you would lose (16.00) from holding ARN Media Limited or give up 18.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARN Media Limited vs. Cooper Metals
Performance |
| Timeline |
| ARN Media Limited |
| Cooper Metals |
ARN Media and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and Cooper Metals
The main advantage of trading using opposite ARN Media and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.| ARN Media vs. Inventis | ARN Media vs. Pengana Private Equity | ARN Media vs. PM Capital Global | ARN Media vs. Macquarie Group Ltd |
| Cooper Metals vs. Event Hospitality and | Cooper Metals vs. COAST ENTERTAINMENT HOLDINGS | Cooper Metals vs. ARN Media Limited | Cooper Metals vs. Ramsay Health Care |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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