Correlation Between EMedia Holdings and We Buy
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and We Buy 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 EMedia Holdings and We Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMedia Holdings Limited and We Buy Cars, you can compare the effects of market volatilities on EMedia Holdings and We Buy 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 EMedia Holdings with a short position of We Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and We Buy.
Diversification Opportunities for EMedia Holdings and We Buy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EMedia and WBC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and We Buy Cars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on We Buy Cars and EMedia Holdings 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 eMedia Holdings Limited are associated (or correlated) with We Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of We Buy Cars has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and We Buy go up and down completely randomly.
Pair Corralation between EMedia Holdings and We Buy
Assuming the 90 days trading horizon EMedia Holdings is expected to generate 9.41 times less return on investment than We Buy. In addition to that, EMedia Holdings is 1.1 times more volatile than We Buy Cars. It trades about 0.04 of its total potential returns per unit of risk. We Buy Cars is currently generating about 0.36 per unit of volatility. If you would invest 303,000 in We Buy Cars on August 31, 2024 and sell it today you would earn a total of 141,500 from holding We Buy Cars or generate 46.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMedia Holdings Limited vs. We Buy Cars
Performance |
| Timeline |
| eMedia Holdings |
| We Buy Cars |
EMedia Holdings and We Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMedia Holdings and We Buy
The main advantage of trading using opposite EMedia Holdings and We Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, We Buy 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 We Buy will offset losses from the drop in We Buy's long position.| EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Astral Foods | EMedia Holdings vs. Astoria Investments | EMedia Holdings vs. ABSA Bank Limited |
| We Buy vs. Safari Investments RSA | We Buy vs. eMedia Holdings Limited | We Buy vs. Afine Investments | We Buy vs. E Media Holdings |
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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