Correlation Between Allient and International Media
Can any of the company-specific risk be diversified away by investing in both Allient and International Media 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 Allient and International Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and International Media Acquisition, you can compare the effects of market volatilities on Allient and International Media 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 Allient with a short position of International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and International Media.
Diversification Opportunities for Allient and International Media
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allient and International is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Allient and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media and Allient 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 Allient are associated (or correlated) with International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Allient i.e., Allient and International Media go up and down completely randomly.
Pair Corralation between Allient and International Media
Given the investment horizon of 90 days Allient is expected to under-perform the International Media. But the stock apears to be less risky and, when comparing its historical volatility, Allient is 23.94 times less risky than International Media. The stock trades about -0.01 of its potential returns per unit of risk. The International Media Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6.24 in International Media Acquisition on August 26, 2024 and sell it today you would lose (0.24) from holding International Media Acquisition or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.88% |
| Values | Daily Returns |
Allient vs. International Media Acquisitio
Performance |
| Timeline |
| Allient |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Allient and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and International Media
The main advantage of trading using opposite Allient and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, International Media 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 International Media will offset losses from the drop in International Media's long position.The idea behind Allient and International Media Acquisition 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.| International Media vs. Black Hills | International Media vs. Iridium Communications | International Media vs. Allient | International Media vs. Western Asset Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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