Correlation Between Bloomsbury Publishing and ITV PLC
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and ITV PLC 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 Bloomsbury Publishing and ITV PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and ITV PLC, you can compare the effects of market volatilities on Bloomsbury Publishing and ITV PLC 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 Bloomsbury Publishing with a short position of ITV PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and ITV PLC.
Diversification Opportunities for Bloomsbury Publishing and ITV PLC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bloomsbury and ITV is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and ITV PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV PLC and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with ITV PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV PLC has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and ITV PLC go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and ITV PLC
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the ITV PLC. But the stock apears to be less risky and, when comparing its historical volatility, Bloomsbury Publishing Plc is 1.9 times less risky than ITV PLC. The stock trades about -0.17 of its potential returns per unit of risk. The ITV PLC is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,345 in ITV PLC on September 12, 2024 and sell it today you would earn a total of 995.00 from holding ITV PLC or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. ITV PLC
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| ITV PLC |
Bloomsbury Publishing and ITV PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and ITV PLC
The main advantage of trading using opposite Bloomsbury Publishing and ITV PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing position performs unexpectedly, ITV PLC 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 ITV PLC will offset losses from the drop in ITV PLC's long position.| Bloomsbury Publishing vs. Catalyst Media Group | Bloomsbury Publishing vs. CATLIN GROUP | Bloomsbury Publishing vs. Tamburi Investment Partners | Bloomsbury Publishing vs. Magnora ASA |
| ITV PLC vs. Associated British Foods | ITV PLC vs. Ecclesiastical Insurance Office | ITV PLC vs. Fevertree Drinks Plc | ITV PLC vs. Monster Beverage Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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