Correlation Between ITV Plc and Loop Media
Can any of the company-specific risk be diversified away by investing in both ITV Plc and Loop Media 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 ITV Plc and Loop Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITV plc and Loop Media, you can compare the effects of market volatilities on ITV Plc and Loop Media 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 ITV Plc with a short position of Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITV Plc and Loop Media.
Diversification Opportunities for ITV Plc and Loop Media
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ITV and Loop is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ITV plc and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media and ITV Plc 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 ITV plc are associated (or correlated) with Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of ITV Plc i.e., ITV Plc and Loop Media go up and down completely randomly.
Pair Corralation between ITV Plc and Loop Media
Assuming the 90 days horizon ITV plc is expected to generate 0.43 times more return on investment than Loop Media. However, ITV plc is 2.31 times less risky than Loop Media. It trades about 0.02 of its potential returns per unit of risk. Loop Media is currently generating about -0.07 per unit of risk. If you would invest 86.00 in ITV plc on August 27, 2024 and sell it today you would lose (5.00) from holding ITV plc or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.91% |
| Values | Daily Returns |
ITV plc vs. Loop Media
Performance |
| Timeline |
| ITV plc |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ITV Plc and Loop Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITV Plc and Loop Media
The main advantage of trading using opposite ITV Plc and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITV Plc position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media's long position.| ITV Plc vs. ProSiebenSat1 Media AG | ITV Plc vs. RTL Group SA | ITV Plc vs. iHeartMedia | ITV Plc vs. TV Azteca SAB |
| Loop Media vs. Acco Brands | Loop Media vs. Lion One Metals | Loop Media vs. Afya | Loop Media vs. Aerofoam Metals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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