Correlation Between Media and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Media and AAC Clyde 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 Media and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and AAC Clyde Space, you can compare the effects of market volatilities on Media and AAC Clyde 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 Media with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and AAC Clyde.
Diversification Opportunities for Media and AAC Clyde
Very weak diversification
The 3 months correlation between Media and AAC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and 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 Media and Games are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Media i.e., Media and AAC Clyde go up and down completely randomly.
Pair Corralation between Media and AAC Clyde
Assuming the 90 days trading horizon Media is expected to generate 2.15 times less return on investment than AAC Clyde. But when comparing it to its historical volatility, Media and Games is 1.22 times less risky than AAC Clyde. It trades about 0.14 of its potential returns per unit of risk. AAC Clyde Space is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,470 in AAC Clyde Space on November 29, 2024 and sell it today you would earn a total of 970.00 from holding AAC Clyde Space or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. AAC Clyde Space
Performance |
| Timeline |
| Media and Games |
| AAC Clyde Space |
Media and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and AAC Clyde
The main advantage of trading using opposite Media and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| Media vs. Embracer Group AB | Media vs. Samhllsbyggnadsbolaget i Norden | Media vs. Sinch AB | Media vs. Zaptec AS |
| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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