Correlation Between Entravision Communications and WINMARK
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and WINMARK 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 WINMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and WINMARK, you can compare the effects of market volatilities on Entravision Communications and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and WINMARK.
Diversification Opportunities for Entravision Communications and WINMARK
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Entravision and WINMARK is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of Entravision Communications i.e., Entravision Communications and WINMARK go up and down completely randomly.
Pair Corralation between Entravision Communications and WINMARK
Assuming the 90 days horizon Entravision Communications is expected to under-perform the WINMARK. In addition to that, Entravision Communications is 2.43 times more volatile than WINMARK. It trades about -0.01 of its total potential returns per unit of risk. WINMARK is currently generating about 0.0 per unit of volatility. If you would invest 40,792 in WINMARK on September 4, 2024 and sell it today you would lose (1,792) from holding WINMARK or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entravision Communications vs. WINMARK
Performance |
| Timeline |
| Entravision Communications |
| WINMARK |
Entravision Communications and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and WINMARK
The main advantage of trading using opposite Entravision Communications and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| Entravision Communications vs. News Corporation | Entravision Communications vs. News Corporation | Entravision Communications vs. Superior Plus Corp | Entravision Communications vs. NMI Holdings |
| WINMARK vs. Alaska Air Group | WINMARK vs. NORWEGIAN AIR SHUT | WINMARK vs. BROADSTNET LEADL 00025 | WINMARK vs. Transportadora de Gas |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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