Correlation Between International Media and Chain Bridge
Can any of the company-specific risk be diversified away by investing in both International Media and Chain Bridge 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 Chain Bridge 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 Chain Bridge I, you can compare the effects of market volatilities on International Media and Chain Bridge 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 Chain Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and Chain Bridge.
Diversification Opportunities for International Media and Chain Bridge
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Chain is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and Chain Bridge I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Bridge I 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 Chain Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Bridge I has no effect on the direction of International Media i.e., International Media and Chain Bridge go up and down completely randomly.
Pair Corralation between International Media and Chain Bridge
If you would invest 0.75 in International Media Acquisition on August 30, 2024 and sell it today you would earn a total of 0.00 from holding International Media Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
International Media Acquisitio vs. Chain Bridge I
Performance |
| Timeline |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chain Bridge I |
International Media and Chain Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Media and Chain Bridge
The main advantage of trading using opposite International Media and Chain Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Media position performs unexpectedly, Chain Bridge 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 Chain Bridge will offset losses from the drop in Chain Bridge's long position.The idea behind International Media Acquisition and Chain Bridge I 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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