Correlation Between IHeartMedia and Mediaco Holding
Can any of the company-specific risk be diversified away by investing in both IHeartMedia and Mediaco Holding 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 IHeartMedia and Mediaco Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iHeartMedia and Mediaco Holding, you can compare the effects of market volatilities on IHeartMedia and Mediaco Holding 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 IHeartMedia with a short position of Mediaco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and Mediaco Holding.
Diversification Opportunities for IHeartMedia and Mediaco Holding
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IHeartMedia and Mediaco is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding and IHeartMedia 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 iHeartMedia are associated (or correlated) with Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of IHeartMedia i.e., IHeartMedia and Mediaco Holding go up and down completely randomly.
Pair Corralation between IHeartMedia and Mediaco Holding
Assuming the 90 days horizon iHeartMedia is expected to generate 0.7 times more return on investment than Mediaco Holding. However, iHeartMedia is 1.43 times less risky than Mediaco Holding. It trades about 0.07 of its potential returns per unit of risk. Mediaco Holding is currently generating about -0.12 per unit of risk. If you would invest 150.00 in iHeartMedia on August 28, 2024 and sell it today you would earn a total of 30.00 from holding iHeartMedia or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iHeartMedia vs. Mediaco Holding
Performance |
| Timeline |
| iHeartMedia |
| Mediaco Holding |
IHeartMedia and Mediaco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHeartMedia and Mediaco Holding
The main advantage of trading using opposite IHeartMedia and Mediaco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHeartMedia position performs unexpectedly, Mediaco Holding 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 Mediaco Holding will offset losses from the drop in Mediaco Holding's long position.| IHeartMedia vs. RTL Group SA | IHeartMedia vs. ITV plc | IHeartMedia vs. ITV PLC ADR | IHeartMedia vs. ProSiebenSat1 Media AG |
| Mediaco Holding vs. ADTRAN Inc | Mediaco Holding vs. Belden Inc | Mediaco Holding vs. ADC Therapeutics SA | Mediaco Holding vs. Comtech Telecommunications Corp |
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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