Correlation Between E Media and Advtech
Can any of the company-specific risk be diversified away by investing in both E Media and Advtech 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 E Media and Advtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Media Holdings and Advtech, you can compare the effects of market volatilities on E Media and Advtech 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 E Media with a short position of Advtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Media and Advtech.
Diversification Opportunities for E Media and Advtech
Very good diversification
The 3 months correlation between EMH and Advtech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding E Media Holdings and Advtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advtech and E 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 E Media Holdings are associated (or correlated) with Advtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advtech has no effect on the direction of E Media i.e., E Media and Advtech go up and down completely randomly.
Pair Corralation between E Media and Advtech
Assuming the 90 days trading horizon E Media is expected to generate 1.68 times less return on investment than Advtech. In addition to that, E Media is 2.5 times more volatile than Advtech. It trades about 0.04 of its total potential returns per unit of risk. Advtech is currently generating about 0.15 per unit of volatility. If you would invest 324,100 in Advtech on October 25, 2024 and sell it today you would earn a total of 13,400 from holding Advtech or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Media Holdings vs. Advtech
Performance |
| Timeline |
| E Media Holdings |
| Advtech |
E Media and Advtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Media and Advtech
The main advantage of trading using opposite E Media and Advtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Media position performs unexpectedly, Advtech 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 Advtech will offset losses from the drop in Advtech's long position.| E Media vs. Reinet Investments SCA | E Media vs. Astoria Investments | E Media vs. Standard Bank Group | E Media vs. Bytes Technology |
| Advtech vs. MC Mining | Advtech vs. Lesaka Technologies | Advtech vs. Allied Electronics | Advtech vs. Harmony Gold Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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