Correlation Between ITV PLC and TV Asahi

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Can any of the company-specific risk be diversified away by investing in both ITV PLC and TV Asahi 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 TV Asahi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITV PLC ADR and TV Asahi Holdings, you can compare the effects of market volatilities on ITV PLC and TV Asahi 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 TV Asahi. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITV PLC and TV Asahi.

Diversification Opportunities for ITV PLC and TV Asahi

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between ITV and THDDY is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ITV PLC ADR and TV Asahi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Asahi Holdings 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 ADR are associated (or correlated) with TV Asahi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Asahi Holdings has no effect on the direction of ITV PLC i.e., ITV PLC and TV Asahi go up and down completely randomly.

Pair Corralation between ITV PLC and TV Asahi

If you would invest  786.00  in ITV PLC ADR on September 14, 2024 and sell it today you would earn a total of  150.00  from holding ITV PLC ADR or generate 19.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

ITV PLC ADR  vs.  TV Asahi Holdings

 Performance 
       Timeline  
ITV PLC ADR 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days ITV PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
TV Asahi Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days TV Asahi Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, TV Asahi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ITV PLC and TV Asahi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ITV PLC and TV Asahi

The main advantage of trading using opposite ITV PLC and TV Asahi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITV PLC position performs unexpectedly, TV Asahi 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 TV Asahi will offset losses from the drop in TV Asahi'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
The idea behind ITV PLC ADR and TV Asahi Holdings 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.
TV Asahi vs. ProSiebenSat1 Media AG
TV Asahi vs. RTL Group SA
TV Asahi vs. iHeartMedia
TV Asahi vs. TV Azteca SAB
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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