Correlation Between International Media and Patria Latin
Can any of the company-specific risk be diversified away by investing in both International Media and Patria Latin 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 International Media and Patria Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Media Acquisition and Patria Latin American, you can compare the effects of market volatilities on International Media and Patria Latin 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 International Media with a short position of Patria Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and Patria Latin.
Diversification Opportunities for International Media and Patria Latin
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Patria is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin American and International Media 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 International Media Acquisition are associated (or correlated) with Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of International Media i.e., International Media and Patria Latin go up and down completely randomly.
Pair Corralation between International Media and Patria Latin
Assuming the 90 days horizon International Media Acquisition is expected to generate 46.46 times more return on investment than Patria Latin. However, International Media is 46.46 times more volatile than Patria Latin American. It trades about 0.11 of its potential returns per unit of risk. Patria Latin American is currently generating about 0.05 per unit of risk. If you would invest 5.00 in International Media Acquisition on September 1, 2024 and sell it today you would earn a total of 1.00 from holding International Media Acquisition or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 27.42% |
| Values | Daily Returns |
International Media Acquisitio vs. Patria Latin American
Performance |
| Timeline |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Patria Latin American |
International Media and Patria Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Media and Patria Latin
The main advantage of trading using opposite International Media and Patria Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Media position performs unexpectedly, Patria Latin 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 Patria Latin will offset losses from the drop in Patria Latin's long position.| International Media vs. Plexus Corp | International Media vs. Sweetgreen | International Media vs. Mind Technology | International Media vs. The Cheesecake Factory |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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