Correlation Between International Media and AXIOS Sustainable
Can any of the company-specific risk be diversified away by investing in both International Media and AXIOS Sustainable 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 AXIOS Sustainable 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 AXIOS Sustainable Growth, you can compare the effects of market volatilities on International Media and AXIOS Sustainable 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 AXIOS Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and AXIOS Sustainable.
Diversification Opportunities for International Media and AXIOS Sustainable
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and AXIOS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and AXIOS Sustainable Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIOS Sustainable Growth 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 AXIOS Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIOS Sustainable Growth has no effect on the direction of International Media i.e., International Media and AXIOS Sustainable go up and down completely randomly.
Pair Corralation between International Media and AXIOS Sustainable
Assuming the 90 days horizon International Media Acquisition is expected to generate 386.16 times more return on investment than AXIOS Sustainable. However, International Media is 386.16 times more volatile than AXIOS Sustainable Growth. It trades about 0.11 of its potential returns per unit of risk. AXIOS Sustainable Growth is currently generating about 0.05 per unit of risk. If you would invest 2.60 in International Media Acquisition on September 28, 2024 and sell it today you would lose (1.85) from holding International Media Acquisition or give up 71.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.54% |
| Values | Daily Returns |
International Media Acquisitio vs. AXIOS Sustainable Growth
Performance |
| Timeline |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AXIOS Sustainable Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Media and AXIOS Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Media and AXIOS Sustainable
The main advantage of trading using opposite International Media and AXIOS Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Media position performs unexpectedly, AXIOS Sustainable 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 AXIOS Sustainable will offset losses from the drop in AXIOS Sustainable's long position.The idea behind International Media Acquisition and AXIOS Sustainable Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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