Correlation Between International Media and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both International Media and Plexus Corp 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 Plexus Corp 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 Plexus Corp, you can compare the effects of market volatilities on International Media and Plexus Corp 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 Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and Plexus Corp.
Diversification Opportunities for International Media and Plexus Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Plexus is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of International Media i.e., International Media and Plexus Corp go up and down completely randomly.
Pair Corralation between International Media and Plexus Corp
Assuming the 90 days horizon International Media Acquisition is expected to generate 6.77 times more return on investment than Plexus Corp. However, International Media is 6.77 times more volatile than Plexus Corp. It trades about 0.11 of its potential returns per unit of risk. Plexus Corp is currently generating about 0.16 per unit of risk. If you would invest 5.01 in International Media Acquisition on September 3, 2024 and sell it today you would earn a total of 0.99 from holding International Media Acquisition or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.6% |
| Values | Daily Returns |
International Media Acquisitio vs. Plexus Corp
Performance |
| Timeline |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Plexus Corp |
International Media and Plexus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Media and Plexus Corp
The main advantage of trading using opposite International Media and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Media position performs unexpectedly, Plexus Corp 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 Plexus Corp will offset losses from the drop in Plexus Corp's long position.| International Media vs. Saia Inc | International Media vs. Western Digital | International Media vs. Radcom | International Media vs. TFI International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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