Correlation Between Entravision Communications and ELECTROLUX
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and ELECTROLUX 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 Entravision Communications and ELECTROLUX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and ELECTROLUX B ADR2, you can compare the effects of market volatilities on Entravision Communications and ELECTROLUX 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 Entravision Communications with a short position of ELECTROLUX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and ELECTROLUX.
Diversification Opportunities for Entravision Communications and ELECTROLUX
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Entravision and ELECTROLUX is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and ELECTROLUX B ADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTROLUX B ADR2 and Entravision 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 Entravision Communications are associated (or correlated) with ELECTROLUX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTROLUX B ADR2 has no effect on the direction of Entravision Communications i.e., Entravision Communications and ELECTROLUX go up and down completely randomly.
Pair Corralation between Entravision Communications and ELECTROLUX
Assuming the 90 days horizon Entravision Communications is expected to generate 2.0 times more return on investment than ELECTROLUX. However, Entravision Communications is 2.0 times more volatile than ELECTROLUX B ADR2. It trades about 0.11 of its potential returns per unit of risk. ELECTROLUX B ADR2 is currently generating about -0.27 per unit of risk. If you would invest 206.00 in Entravision Communications on September 5, 2024 and sell it today you would earn a total of 18.00 from holding Entravision Communications or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Entravision Communications vs. ELECTROLUX B ADR2
Performance |
| Timeline |
| Entravision Communications |
| ELECTROLUX B ADR2 |
Entravision Communications and ELECTROLUX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and ELECTROLUX
The main advantage of trading using opposite Entravision Communications and ELECTROLUX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, ELECTROLUX 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 ELECTROLUX will offset losses from the drop in ELECTROLUX's long position.| Entravision Communications vs. News Corporation | Entravision Communications vs. News Corporation | Entravision Communications vs. Superior Plus Corp | Entravision Communications vs. NMI Holdings |
| ELECTROLUX vs. LG Display Co | ELECTROLUX vs. Globe Trade Centre | ELECTROLUX vs. TRADEDOUBLER AB SK | ELECTROLUX vs. Ribbon Communications |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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