Correlation Between Entravision Communications and AcuityAds Holdings
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and AcuityAds Holdings 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 AcuityAds Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and AcuityAds Holdings, you can compare the effects of market volatilities on Entravision Communications and AcuityAds Holdings 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 AcuityAds Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and AcuityAds Holdings.
Diversification Opportunities for Entravision Communications and AcuityAds Holdings
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entravision and AcuityAds is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and AcuityAds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcuityAds Holdings 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 AcuityAds Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcuityAds Holdings has no effect on the direction of Entravision Communications i.e., Entravision Communications and AcuityAds Holdings go up and down completely randomly.
Pair Corralation between Entravision Communications and AcuityAds Holdings
If you would invest 228.00 in Entravision Communications on August 28, 2024 and sell it today you would earn a total of 17.00 from holding Entravision Communications or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Entravision Communications vs. AcuityAds Holdings
Performance |
| Timeline |
| Entravision Communications |
| AcuityAds Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Entravision Communications and AcuityAds Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and AcuityAds Holdings
The main advantage of trading using opposite Entravision Communications and AcuityAds Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, AcuityAds Holdings 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 AcuityAds Holdings will offset losses from the drop in AcuityAds Holdings' long position.| Entravision Communications vs. Marchex | Entravision Communications vs. Direct Digital Holdings | Entravision Communications vs. Cimpress NV | Entravision Communications vs. Townsquare Media |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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