Correlation Between Media Sentiment and Hello
Can any of the company-specific risk be diversified away by investing in both Media Sentiment and Hello 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 Sentiment and Hello into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Sentiment and Hello Group, you can compare the effects of market volatilities on Media Sentiment and Hello 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 Sentiment with a short position of Hello. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Sentiment and Hello.
Diversification Opportunities for Media Sentiment and Hello
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Media and Hello is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Media Sentiment and Hello Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hello Group and Media Sentiment 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 Sentiment are associated (or correlated) with Hello. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hello Group has no effect on the direction of Media Sentiment i.e., Media Sentiment and Hello go up and down completely randomly.
Pair Corralation between Media Sentiment and Hello
Given the investment horizon of 90 days Media Sentiment is expected to generate 7.71 times more return on investment than Hello. However, Media Sentiment is 7.71 times more volatile than Hello Group. It trades about 0.07 of its potential returns per unit of risk. Hello Group is currently generating about 0.01 per unit of risk. If you would invest 10.00 in Media Sentiment on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Media Sentiment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Media Sentiment vs. Hello Group
Performance |
| Timeline |
| Media Sentiment |
| Hello Group |
Media Sentiment and Hello Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Sentiment and Hello
The main advantage of trading using opposite Media Sentiment and Hello positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Sentiment position performs unexpectedly, Hello 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 Hello will offset losses from the drop in Hello's long position.| Media Sentiment vs. Global Develpmts | Media Sentiment vs. Il2m International Corp | Media Sentiment vs. Mediag3 | Media Sentiment vs. Mobile Lads Corp |
| Hello vs. Weibo Corp | Hello vs. Autohome | Hello vs. Tencent Music Entertainment | Hello vs. DouYu International Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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