Correlation Between Arrow Electronics and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Beijing MediaLimited 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 Arrow Electronics and Beijing MediaLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Beijing Media, you can compare the effects of market volatilities on Arrow Electronics and Beijing MediaLimited 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 Arrow Electronics with a short position of Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Beijing MediaLimited.
Diversification Opportunities for Arrow Electronics and Beijing MediaLimited
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arrow and Beijing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between Arrow Electronics and Beijing MediaLimited
Assuming the 90 days horizon Arrow Electronics is expected to under-perform the Beijing MediaLimited. But the stock apears to be less risky and, when comparing its historical volatility, Arrow Electronics is 1.03 times less risky than Beijing MediaLimited. The stock trades about -0.11 of its potential returns per unit of risk. The Beijing Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.55 in Beijing Media on August 28, 2024 and sell it today you would earn a total of 0.05 from holding Beijing Media or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Beijing Media
Performance |
| Timeline |
| Arrow Electronics |
| Beijing MediaLimited |
Arrow Electronics and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Beijing MediaLimited
The main advantage of trading using opposite Arrow Electronics and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| Arrow Electronics vs. CeoTronics AG | Arrow Electronics vs. Japan Medical Dynamic | Arrow Electronics vs. MEDICAL FACILITIES NEW | Arrow Electronics vs. Apollo Medical Holdings |
| Beijing MediaLimited vs. The Interpublic Group | Beijing MediaLimited vs. Superior Plus Corp | Beijing MediaLimited vs. NMI Holdings | Beijing MediaLimited vs. Origin Agritech |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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