Correlation Between IBEX 35 and Media Investment
Can any of the company-specific risk be diversified away by investing in both IBEX 35 and Media Investment 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 IBEX 35 and Media Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX 35 Index and Media Investment Optimization, you can compare the effects of market volatilities on IBEX 35 and Media Investment 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 IBEX 35 with a short position of Media Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and Media Investment.
Diversification Opportunities for IBEX 35 and Media Investment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IBEX and Media is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and Media Investment Optimization in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Investment Opt and IBEX 35 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 IBEX 35 Index are associated (or correlated) with Media Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Investment Opt has no effect on the direction of IBEX 35 i.e., IBEX 35 and Media Investment go up and down completely randomly.
Pair Corralation between IBEX 35 and Media Investment
Assuming the 90 days trading horizon IBEX 35 Index is expected to generate 0.44 times more return on investment than Media Investment. However, IBEX 35 Index is 2.28 times less risky than Media Investment. It trades about -0.04 of its potential returns per unit of risk. Media Investment Optimization is currently generating about -0.21 per unit of risk. If you would invest 1,171,500 in IBEX 35 Index on August 31, 2024 and sell it today you would lose (10,420) from holding IBEX 35 Index or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBEX 35 Index vs. Media Investment Optimization
Performance |
| Timeline |
IBEX 35 and Media Investment Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
Media Investment Optimization
Pair trading matchups for Media Investment
Pair Trading with IBEX 35 and Media Investment
The main advantage of trading using opposite IBEX 35 and Media Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 position performs unexpectedly, Media Investment 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 Media Investment will offset losses from the drop in Media Investment's long position.| IBEX 35 vs. Hispanotels Inversiones SOCIMI | IBEX 35 vs. Arteche Lantegi Elkartea | IBEX 35 vs. Vytrus Biotech SA | IBEX 35 vs. Borges Agricultural Industrial |
| Media Investment vs. Making Science Group | Media Investment vs. Lyxor UCITS Ibex35 | Media Investment vs. Metrovacesa SA | Media Investment vs. Hispanotels Inversiones SOCIMI |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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