Correlation Between Network Media and Maxx Sports
Can any of the company-specific risk be diversified away by investing in both Network Media and Maxx Sports 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 Network Media and Maxx Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network Media Group and Maxx Sports TV, you can compare the effects of market volatilities on Network Media and Maxx Sports 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 Network Media with a short position of Maxx Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Maxx Sports.
Diversification Opportunities for Network Media and Maxx Sports
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Network and Maxx is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Maxx Sports TV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxx Sports TV and Network 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 Network Media Group are associated (or correlated) with Maxx Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxx Sports TV has no effect on the direction of Network Media i.e., Network Media and Maxx Sports go up and down completely randomly.
Pair Corralation between Network Media and Maxx Sports
Assuming the 90 days horizon Network Media Group is expected to generate 0.83 times more return on investment than Maxx Sports. However, Network Media Group is 1.2 times less risky than Maxx Sports. It trades about -0.11 of its potential returns per unit of risk. Maxx Sports TV is currently generating about -0.22 per unit of risk. If you would invest 8.99 in Network Media Group on August 28, 2024 and sell it today you would lose (2.69) from holding Network Media Group or give up 29.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Network Media Group vs. Maxx Sports TV
Performance |
| Timeline |
| Network Media Group |
| Maxx Sports TV |
Network Media and Maxx Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network Media and Maxx Sports
The main advantage of trading using opposite Network Media and Maxx Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network Media position performs unexpectedly, Maxx Sports 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 Maxx Sports will offset losses from the drop in Maxx Sports' long position.| Network Media vs. New Wave Holdings | Network Media vs. ZoomerMedia Limited | Network Media vs. OverActive Media Corp | Network Media vs. Celtic plc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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