Correlation Between Associated British and Atresmedia
Can any of the company-specific risk be diversified away by investing in both Associated British and Atresmedia 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 Associated British and Atresmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Atresmedia, you can compare the effects of market volatilities on Associated British and Atresmedia 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 Associated British with a short position of Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Atresmedia.
Diversification Opportunities for Associated British and Atresmedia
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Associated and Atresmedia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia and Associated British 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 Associated British Foods are associated (or correlated) with Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Associated British i.e., Associated British and Atresmedia go up and down completely randomly.
Pair Corralation between Associated British and Atresmedia
Assuming the 90 days trading horizon Associated British Foods is expected to under-perform the Atresmedia. But the stock apears to be less risky and, when comparing its historical volatility, Associated British Foods is 1.7 times less risky than Atresmedia. The stock trades about -0.44 of its potential returns per unit of risk. The Atresmedia is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Atresmedia on October 11, 2024 and sell it today you would lose (7.00) from holding Atresmedia or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated British Foods vs. Atresmedia
Performance |
| Timeline |
| Associated British Foods |
| Atresmedia |
Associated British and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated British and Atresmedia
The main advantage of trading using opposite Associated British and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| Associated British vs. Synchrony Financial | Associated British vs. Sydbank | Associated British vs. International Biotechnology Trust | Associated British vs. FinecoBank SpA |
| Atresmedia vs. Sligro Food Group | Atresmedia vs. Ashtead Technology Holdings | Atresmedia vs. Allianz Technology Trust | Atresmedia vs. Celebrus Technologies plc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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