Correlation Between Fill Up and Netmedia Group
Can any of the company-specific risk be diversified away by investing in both Fill Up and Netmedia Group 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 Fill Up and Netmedia Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fill Up Media and Netmedia Group SA, you can compare the effects of market volatilities on Fill Up and Netmedia Group 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 Fill Up with a short position of Netmedia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fill Up and Netmedia Group.
Diversification Opportunities for Fill Up and Netmedia Group
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fill and Netmedia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fill Up Media and Netmedia Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmedia Group SA and Fill Up 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 Fill Up Media are associated (or correlated) with Netmedia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmedia Group SA has no effect on the direction of Fill Up i.e., Fill Up and Netmedia Group go up and down completely randomly.
Pair Corralation between Fill Up and Netmedia Group
Assuming the 90 days trading horizon Fill Up is expected to generate 1.17 times less return on investment than Netmedia Group. But when comparing it to its historical volatility, Fill Up Media is 2.33 times less risky than Netmedia Group. It trades about 0.16 of its potential returns per unit of risk. Netmedia Group SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Netmedia Group SA on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Netmedia Group SA or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fill Up Media vs. Netmedia Group SA
Performance |
| Timeline |
| Fill Up Media |
| Netmedia Group SA |
Fill Up and Netmedia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fill Up and Netmedia Group
The main advantage of trading using opposite Fill Up and Netmedia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fill Up position performs unexpectedly, Netmedia Group 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 Netmedia Group will offset losses from the drop in Netmedia Group's long position.The idea behind Fill Up Media and Netmedia Group SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Netmedia Group vs. LVMH Mot Hennessy | Netmedia Group vs. LOreal SA | Netmedia Group vs. Hermes International SCA | Netmedia Group vs. Manitou BF SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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