Correlation Between Advanced Medical and Everyman Media
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Everyman 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 Advanced Medical and Everyman Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Everyman Media Group, you can compare the effects of market volatilities on Advanced Medical and Everyman 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 Advanced Medical with a short position of Everyman Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Everyman Media.
Diversification Opportunities for Advanced Medical and Everyman Media
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advanced and Everyman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Everyman Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everyman Media Group and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Everyman Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everyman Media Group has no effect on the direction of Advanced Medical i.e., Advanced Medical and Everyman Media go up and down completely randomly.
Pair Corralation between Advanced Medical and Everyman Media
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.33 times more return on investment than Everyman Media. However, Advanced Medical is 1.33 times more volatile than Everyman Media Group. It trades about -0.01 of its potential returns per unit of risk. Everyman Media Group is currently generating about -0.03 per unit of risk. If you would invest 24,431 in Advanced Medical Solutions on October 7, 2024 and sell it today you would lose (5,211) from holding Advanced Medical Solutions or give up 21.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Everyman Media Group
Performance |
| Timeline |
| Advanced Medical Sol |
| Everyman Media Group |
Advanced Medical and Everyman Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Everyman Media
The main advantage of trading using opposite Advanced Medical and Everyman Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Everyman 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 Everyman Media will offset losses from the drop in Everyman Media's long position.| Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Toyota Motor Corp | Advanced Medical vs. Reliance Industries Ltd |
| Everyman Media vs. Toyota Motor Corp | Everyman Media vs. Halyk Bank of | Everyman Media vs. Samsung Electronics Co | Everyman Media vs. Guaranty Trust Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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