Correlation Between Midsona AB and Media
Can any of the company-specific risk be diversified away by investing in both Midsona AB and Media 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 Midsona AB and Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midsona AB and Media and Games, you can compare the effects of market volatilities on Midsona AB and Media 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 Midsona AB with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midsona AB and Media.
Diversification Opportunities for Midsona AB and Media
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Midsona and Media is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Midsona AB and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games and Midsona AB 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 Midsona AB are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Midsona AB i.e., Midsona AB and Media go up and down completely randomly.
Pair Corralation between Midsona AB and Media
Assuming the 90 days trading horizon Midsona AB is expected to generate 4.53 times less return on investment than Media. But when comparing it to its historical volatility, Midsona AB is 3.17 times less risky than Media. It trades about 0.11 of its potential returns per unit of risk. Media and Games is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,836 in Media and Games on September 2, 2024 and sell it today you would earn a total of 2,144 from holding Media and Games or generate 116.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midsona AB vs. Media and Games
Performance |
| Timeline |
| Midsona AB |
| Media and Games |
Midsona AB and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midsona AB and Media
The main advantage of trading using opposite Midsona AB and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midsona AB position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Midsona AB vs. Midsona AB | Midsona AB vs. Know IT AB | Midsona AB vs. Probi AB | Midsona AB vs. BTS Group AB |
| Media vs. MilDef Group AB | Media vs. Fractal Gaming Group | Media vs. KABE Group AB | Media vs. IAR Systems Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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