Correlation Between Emmis Communications and ITV PLC
Can any of the company-specific risk be diversified away by investing in both Emmis Communications and ITV PLC 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 Emmis Communications and ITV PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmis Communications Corp and ITV PLC ADR, you can compare the effects of market volatilities on Emmis Communications and ITV PLC 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 Emmis Communications with a short position of ITV PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmis Communications and ITV PLC.
Diversification Opportunities for Emmis Communications and ITV PLC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emmis and ITV is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Emmis Communications Corp and ITV PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV PLC ADR and Emmis Communications 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 Emmis Communications Corp are associated (or correlated) with ITV PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV PLC ADR has no effect on the direction of Emmis Communications i.e., Emmis Communications and ITV PLC go up and down completely randomly.
Pair Corralation between Emmis Communications and ITV PLC
If you would invest 390.00 in Emmis Communications Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Emmis Communications Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Emmis Communications Corp vs. ITV PLC ADR
Performance |
| Timeline |
| Emmis Communications Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ITV PLC ADR |
Emmis Communications and ITV PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmis Communications and ITV PLC
The main advantage of trading using opposite Emmis Communications and ITV PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmis Communications position performs unexpectedly, ITV PLC 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 ITV PLC will offset losses from the drop in ITV PLC's long position.| Emmis Communications vs. RTL Group SA | Emmis Communications vs. ITV plc | Emmis Communications vs. ITV PLC ADR | Emmis Communications vs. iHeartMedia |
| ITV PLC vs. ProSiebenSat1 Media AG | ITV PLC vs. RTL Group SA | ITV PLC vs. iHeartMedia | ITV PLC vs. TV Azteca SAB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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