Correlation Between Bowler Metcalf and E Media
Can any of the company-specific risk be diversified away by investing in both Bowler Metcalf and E 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 Bowler Metcalf and E Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowler Metcalf and E Media Holdings, you can compare the effects of market volatilities on Bowler Metcalf and E 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 Bowler Metcalf with a short position of E Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowler Metcalf and E Media.
Diversification Opportunities for Bowler Metcalf and E Media
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bowler and EMH is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bowler Metcalf and E Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Media Holdings and Bowler Metcalf 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 Bowler Metcalf are associated (or correlated) with E Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Media Holdings has no effect on the direction of Bowler Metcalf i.e., Bowler Metcalf and E Media go up and down completely randomly.
Pair Corralation between Bowler Metcalf and E Media
Assuming the 90 days trading horizon Bowler Metcalf is expected to generate 1.55 times more return on investment than E Media. However, Bowler Metcalf is 1.55 times more volatile than E Media Holdings. It trades about 0.05 of its potential returns per unit of risk. E Media Holdings is currently generating about 0.01 per unit of risk. If you would invest 94,100 in Bowler Metcalf on September 2, 2024 and sell it today you would earn a total of 35,900 from holding Bowler Metcalf or generate 38.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Bowler Metcalf vs. E Media Holdings
Performance |
| Timeline |
| Bowler Metcalf |
| E Media Holdings |
Bowler Metcalf and E Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowler Metcalf and E Media
The main advantage of trading using opposite Bowler Metcalf and E Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowler Metcalf position performs unexpectedly, E 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 E Media will offset losses from the drop in E Media's long position.| Bowler Metcalf vs. E Media Holdings | Bowler Metcalf vs. Capitec Bank Holdings | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. Allied Electronics |
| E Media vs. Brimstone Investment | E Media vs. Astoria Investments | E Media vs. HomeChoice Investments | E Media vs. British American Tobacco |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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