Correlation Between Advtech and EMedia Holdings
Can any of the company-specific risk be diversified away by investing in both Advtech and EMedia Holdings 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 Advtech and EMedia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advtech and eMedia Holdings Limited, you can compare the effects of market volatilities on Advtech and EMedia Holdings 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 Advtech with a short position of EMedia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advtech and EMedia Holdings.
Diversification Opportunities for Advtech and EMedia Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advtech and EMedia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Advtech and eMedia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMedia Holdings and Advtech 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 Advtech are associated (or correlated) with EMedia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMedia Holdings has no effect on the direction of Advtech i.e., Advtech and EMedia Holdings go up and down completely randomly.
Pair Corralation between Advtech and EMedia Holdings
Assuming the 90 days trading horizon Advtech is expected to generate 0.67 times more return on investment than EMedia Holdings. However, Advtech is 1.5 times less risky than EMedia Holdings. It trades about 0.13 of its potential returns per unit of risk. eMedia Holdings Limited is currently generating about -0.04 per unit of risk. If you would invest 319,500 in Advtech on August 31, 2024 and sell it today you would earn a total of 11,000 from holding Advtech or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advtech vs. eMedia Holdings Limited
Performance |
| Timeline |
| Advtech |
| eMedia Holdings |
Advtech and EMedia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advtech and EMedia Holdings
The main advantage of trading using opposite Advtech and EMedia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advtech position performs unexpectedly, EMedia Holdings 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 EMedia Holdings will offset losses from the drop in EMedia Holdings' long position.| Advtech vs. Zeder Investments | Advtech vs. Deneb Investments | Advtech vs. African Media Entertainment | Advtech vs. HomeChoice Investments |
| EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Astral Foods | EMedia Holdings vs. Astoria Investments | EMedia Holdings vs. ABSA Bank Limited |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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