Correlation Between ARN Media and Wt Financial
Can any of the company-specific risk be diversified away by investing in both ARN Media and Wt Financial 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 Wt Financial 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 Wt Financial Group, you can compare the effects of market volatilities on ARN Media and Wt Financial 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 Wt Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and Wt Financial.
Diversification Opportunities for ARN Media and Wt Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARN and WTL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and Wt Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wt Financial Group 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 Wt Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wt Financial Group has no effect on the direction of ARN Media i.e., ARN Media and Wt Financial go up and down completely randomly.
Pair Corralation between ARN Media and Wt Financial
Assuming the 90 days trading horizon ARN Media Limited is expected to under-perform the Wt Financial. But the stock apears to be less risky and, when comparing its historical volatility, ARN Media Limited is 1.2 times less risky than Wt Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Wt Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.38 in Wt Financial Group on November 8, 2024 and sell it today you would earn a total of 4.62 from holding Wt Financial Group or generate 49.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARN Media Limited vs. Wt Financial Group
Performance |
| Timeline |
| ARN Media Limited |
| Wt Financial Group |
ARN Media and Wt Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and Wt Financial
The main advantage of trading using opposite ARN Media and Wt Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, Wt Financial 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 Wt Financial will offset losses from the drop in Wt Financial's long position.| ARN Media vs. Andean Silver Limited | ARN Media vs. Peel Mining | ARN Media vs. Australian Unity Office | ARN Media vs. Charter Hall Retail |
| Wt Financial vs. Sun Silver Limited | Wt Financial vs. M3 Mining | Wt Financial vs. Chalice Mining Limited | Wt Financial vs. Kkr Credit Income |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |