Correlation Between Cumulus Media and ImpediMed
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and ImpediMed 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 Cumulus Media and ImpediMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and ImpediMed Limited, you can compare the effects of market volatilities on Cumulus Media and ImpediMed 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 Cumulus Media with a short position of ImpediMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and ImpediMed.
Diversification Opportunities for Cumulus Media and ImpediMed
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cumulus and ImpediMed is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and ImpediMed Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImpediMed Limited and Cumulus 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 Cumulus Media Class are associated (or correlated) with ImpediMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImpediMed Limited has no effect on the direction of Cumulus Media i.e., Cumulus Media and ImpediMed go up and down completely randomly.
Pair Corralation between Cumulus Media and ImpediMed
Given the investment horizon of 90 days Cumulus Media Class is expected to generate 0.85 times more return on investment than ImpediMed. However, Cumulus Media Class is 1.17 times less risky than ImpediMed. It trades about -0.27 of its potential returns per unit of risk. ImpediMed Limited is currently generating about -0.28 per unit of risk. If you would invest 84.00 in Cumulus Media Class on December 4, 2024 and sell it today you would lose (33.00) from holding Cumulus Media Class or give up 39.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cumulus Media Class vs. ImpediMed Limited
Performance |
| Timeline |
| Cumulus Media Class |
| ImpediMed Limited |
Cumulus Media and ImpediMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and ImpediMed
The main advantage of trading using opposite Cumulus Media and ImpediMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, ImpediMed 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 ImpediMed will offset losses from the drop in ImpediMed's long position.| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
| ImpediMed vs. Chemours Co | ImpediMed vs. Olympic Steel | ImpediMed vs. NuRAN Wireless | ImpediMed vs. Weibo 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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