Correlation Between Trump Media and IAC
Can any of the company-specific risk be diversified away by investing in both Trump Media and IAC 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 Trump Media and IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trump Media Technology and IAC Inc, you can compare the effects of market volatilities on Trump Media and IAC 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 Trump Media with a short position of IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trump Media and IAC.
Diversification Opportunities for Trump Media and IAC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trump and IAC is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc and Trump 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 Trump Media Technology are associated (or correlated) with IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of Trump Media i.e., Trump Media and IAC go up and down completely randomly.
Pair Corralation between Trump Media and IAC
Considering the 90-day investment horizon Trump Media Technology is expected to under-perform the IAC. In addition to that, Trump Media is 3.04 times more volatile than IAC Inc. It trades about -0.13 of its total potential returns per unit of risk. IAC Inc is currently generating about -0.06 per unit of volatility. If you would invest 5,146 in IAC Inc on August 27, 2024 and sell it today you would lose (299.00) from holding IAC Inc or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trump Media Technology vs. IAC Inc
Performance |
| Timeline |
| Trump Media Technology |
| IAC Inc |
Trump Media and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trump Media and IAC
The main advantage of trading using opposite Trump Media and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC's long position.| Trump Media vs. Texas Roadhouse | Trump Media vs. Weibo Corp | Trump Media vs. The Wendys Co | Trump Media vs. Bt Brands |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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