Correlation Between Media and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Media and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on Media and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and CeoTronics.
Diversification Opportunities for Media and CeoTronics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and CeoTronics is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Media i.e., Media and CeoTronics go up and down completely randomly.
Pair Corralation between Media and CeoTronics
Assuming the 90 days trading horizon Media and Games is expected to generate 1.64 times more return on investment than CeoTronics. However, Media is 1.64 times more volatile than CeoTronics AG. It trades about 0.06 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.04 per unit of risk. If you would invest 165.00 in Media and Games on November 7, 2024 and sell it today you would earn a total of 172.00 from holding Media and Games or generate 104.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. CeoTronics AG
Performance |
| Timeline |
| Media and Games |
| CeoTronics AG |
Media and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and CeoTronics
The main advantage of trading using opposite Media and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Media vs. PARKEN Sport Entertainment | Media vs. Burlington Stores | Media vs. SQUIRREL MEDIA SA | Media vs. ATRESMEDIA |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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