Correlation Between E Media and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both E Media and Bytes Technology 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 Bytes Technology 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 Bytes Technology, you can compare the effects of market volatilities on E Media and Bytes Technology 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 Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Media and Bytes Technology.
Diversification Opportunities for E Media and Bytes Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EMH and Bytes is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding E Media Holdings and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of E Media i.e., E Media and Bytes Technology go up and down completely randomly.
Pair Corralation between E Media and Bytes Technology
Assuming the 90 days trading horizon E Media Holdings is expected to under-perform the Bytes Technology. In addition to that, E Media is 1.15 times more volatile than Bytes Technology. It trades about -0.19 of its total potential returns per unit of risk. Bytes Technology is currently generating about 0.0 per unit of volatility. If you would invest 965,700 in Bytes Technology on October 22, 2024 and sell it today you would lose (600.00) from holding Bytes Technology or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
E Media Holdings vs. Bytes Technology
Performance |
| Timeline |
| E Media Holdings |
| Bytes Technology |
E Media and Bytes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Media and Bytes Technology
The main advantage of trading using opposite E Media and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Media position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.| E Media vs. Datatec | E Media vs. Harmony Gold Mining | E Media vs. MC Mining | E Media vs. Deneb Investments |
| Bytes Technology vs. HomeChoice Investments | Bytes Technology vs. RCL Foods | Bytes Technology vs. Boxer Retail | Bytes Technology vs. Astral Foods |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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