Correlation Between Beijing MediaLimited and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited and Spirent Communications 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 Beijing MediaLimited and Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Spirent Communications plc, you can compare the effects of market volatilities on Beijing MediaLimited and Spirent Communications 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 Beijing MediaLimited with a short position of Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and Spirent Communications.
Diversification Opportunities for Beijing MediaLimited and Spirent Communications
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Spirent is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications and Beijing MediaLimited 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 Beijing Media are associated (or correlated) with Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Beijing MediaLimited i.e., Beijing MediaLimited and Spirent Communications go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and Spirent Communications
Assuming the 90 days horizon Beijing Media is expected to generate 3.02 times more return on investment than Spirent Communications. However, Beijing MediaLimited is 3.02 times more volatile than Spirent Communications plc. It trades about 0.04 of its potential returns per unit of risk. Spirent Communications plc is currently generating about 0.05 per unit of risk. 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. Spirent Communications plc
Performance |
| Timeline |
| Beijing MediaLimited |
| Spirent Communications |
Beijing MediaLimited and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and Spirent Communications
The main advantage of trading using opposite Beijing MediaLimited and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Beijing MediaLimited vs. The Interpublic Group | Beijing MediaLimited vs. Superior Plus Corp | Beijing MediaLimited vs. NMI Holdings | Beijing MediaLimited vs. Origin Agritech |
| Spirent Communications vs. T Mobile | Spirent Communications vs. ATT Inc | Spirent Communications vs. Deutsche Telekom AG |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets |