Correlation Between US Financial and Network Media
Can any of the company-specific risk be diversified away by investing in both US Financial and Network Media 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 US Financial and Network Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Financial 15 and Network Media Group, you can compare the effects of market volatilities on US Financial and Network Media 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 US Financial with a short position of Network Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Financial and Network Media.
Diversification Opportunities for US Financial and Network Media
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FTU-PB and Network is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding US Financial 15 and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media Group and US Financial 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 US Financial 15 are associated (or correlated) with Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of US Financial i.e., US Financial and Network Media go up and down completely randomly.
Pair Corralation between US Financial and Network Media
Assuming the 90 days trading horizon US Financial 15 is expected to generate 0.28 times more return on investment than Network Media. However, US Financial 15 is 3.61 times less risky than Network Media. It trades about 0.12 of its potential returns per unit of risk. Network Media Group is currently generating about -0.01 per unit of risk. If you would invest 505.00 in US Financial 15 on September 4, 2024 and sell it today you would earn a total of 267.00 from holding US Financial 15 or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Financial 15 vs. Network Media Group
Performance |
| Timeline |
| US Financial 15 |
| Network Media Group |
US Financial and Network Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Financial and Network Media
The main advantage of trading using opposite US Financial and Network Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Financial position performs unexpectedly, Network Media 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 Network Media will offset losses from the drop in Network Media's long position.| US Financial vs. Apple Inc CDR | US Financial vs. Microsoft Corp CDR | US Financial vs. Amazon CDR | US Financial vs. Alphabet Inc CDR |
| Network Media vs. Renoworks Software | Network Media vs. Urbanimmersive | Network Media vs. Pioneering Technology Corp | Network Media vs. Gatekeeper Systems |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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