Correlation Between ITV Plc and Mediaco Holding
Can any of the company-specific risk be diversified away by investing in both ITV Plc and Mediaco Holding 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 Mediaco Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITV plc and Mediaco Holding, you can compare the effects of market volatilities on ITV Plc and Mediaco Holding 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 Mediaco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITV Plc and Mediaco Holding.
Diversification Opportunities for ITV Plc and Mediaco Holding
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITV and Mediaco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ITV plc and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding 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 Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of ITV Plc i.e., ITV Plc and Mediaco Holding go up and down completely randomly.
Pair Corralation between ITV Plc and Mediaco Holding
Assuming the 90 days horizon ITV plc is expected to under-perform the Mediaco Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, ITV plc is 1.06 times less risky than Mediaco Holding. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Mediaco Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 127.00 in Mediaco Holding on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Mediaco Holding or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITV plc vs. Mediaco Holding
Performance |
| Timeline |
| ITV plc |
| Mediaco Holding |
ITV Plc and Mediaco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITV Plc and Mediaco Holding
The main advantage of trading using opposite ITV Plc and Mediaco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITV Plc position performs unexpectedly, Mediaco Holding 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 Mediaco Holding will offset losses from the drop in Mediaco Holding'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 |
| Mediaco Holding vs. ADTRAN Inc | Mediaco Holding vs. Belden Inc | Mediaco Holding vs. ADC Therapeutics SA | Mediaco Holding vs. Comtech Telecommunications Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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