Correlation Between Digital Media and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both Digital Media and IMedia Brands 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 Digital Media and IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Media Solutions and IMedia Brands, you can compare the effects of market volatilities on Digital Media and IMedia Brands 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 Digital Media with a short position of IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Media and IMedia Brands.
Diversification Opportunities for Digital Media and IMedia Brands
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Digital and IMedia is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Digital Media Solutions and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands and Digital 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 Digital Media Solutions are associated (or correlated) with IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of Digital Media i.e., Digital Media and IMedia Brands go up and down completely randomly.
Pair Corralation between Digital Media and IMedia Brands
If you would invest 2.94 in IMedia Brands on September 19, 2024 and sell it today you would earn a total of 0.00 from holding IMedia Brands or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Media Solutions vs. IMedia Brands
Performance |
| Timeline |
| Digital Media Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Digital Media and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Media and IMedia Brands
The main advantage of trading using opposite Digital Media and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Media position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.| Digital Media vs. Advantage Solutions | Digital Media vs. Townsquare Media | Digital Media vs. Entravision Communications | Digital Media vs. Emerald Expositions Events |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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