Correlation Between Beijing Media and Grammer AG
Can any of the company-specific risk be diversified away by investing in both Beijing Media and Grammer AG 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 Media and Grammer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Grammer AG, you can compare the effects of market volatilities on Beijing Media and Grammer AG 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 Media with a short position of Grammer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Media and Grammer AG.
Diversification Opportunities for Beijing Media and Grammer AG
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijing and Grammer is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and Grammer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grammer AG and Beijing Media 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 Grammer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grammer AG has no effect on the direction of Beijing Media i.e., Beijing Media and Grammer AG go up and down completely randomly.
Pair Corralation between Beijing Media and Grammer AG
Assuming the 90 days horizon Beijing Media is expected to generate 4.24 times more return on investment than Grammer AG. However, Beijing Media is 4.24 times more volatile than Grammer AG. It trades about 0.06 of its potential returns per unit of risk. Grammer AG is currently generating about -0.47 per unit of risk. If you would invest 3.45 in Beijing Media on September 12, 2024 and sell it today you would earn a total of 0.15 from holding Beijing Media or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beijing Media vs. Grammer AG
Performance |
| Timeline |
| Beijing Media |
| Grammer AG |
Beijing Media and Grammer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Media and Grammer AG
The main advantage of trading using opposite Beijing Media and Grammer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Media position performs unexpectedly, Grammer AG 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 Grammer AG will offset losses from the drop in Grammer AG's long position.| Beijing Media vs. Superior Plus Corp | Beijing Media vs. SIVERS SEMICONDUCTORS AB | Beijing Media vs. NorAm Drilling AS | Beijing Media vs. Norsk Hydro ASA |
| Grammer AG vs. CompuGroup Medical SE | Grammer AG vs. Apollo Medical Holdings | Grammer AG vs. SOLSTAD OFFSHORE NK | Grammer AG vs. Japan Medical Dynamic |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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