Correlation Between Media and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Media and KAUFMAN ET 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 KAUFMAN ET 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 KAUFMAN ET BROAD, you can compare the effects of market volatilities on Media and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and KAUFMAN ET.
Diversification Opportunities for Media and KAUFMAN ET
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Media and KAUFMAN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Media i.e., Media and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Media and KAUFMAN ET
Assuming the 90 days trading horizon Media and Games is expected to generate 1.89 times more return on investment than KAUFMAN ET. However, Media is 1.89 times more volatile than KAUFMAN ET BROAD. It trades about 0.16 of its potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.03 per unit of risk. If you would invest 91.00 in Media and Games on September 5, 2024 and sell it today you would earn a total of 271.00 from holding Media and Games or generate 297.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Media and Games |
| KAUFMAN ET BROAD |
Media and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and KAUFMAN ET
The main advantage of trading using opposite Media and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| Media vs. Rocket Internet SE | Media vs. Superior Plus Corp | Media vs. NMI Holdings | Media vs. Origin Agritech |
| KAUFMAN ET vs. TOTAL GABON | KAUFMAN ET vs. Walgreens Boots Alliance | KAUFMAN ET vs. Peak Resources Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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