Correlation Between Nova Vision and International Media
Can any of the company-specific risk be diversified away by investing in both Nova Vision and International 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 Nova Vision and International Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Vision Acquisition and International Media Acquisition, you can compare the effects of market volatilities on Nova Vision and International 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 Nova Vision with a short position of International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Vision and International Media.
Diversification Opportunities for Nova Vision and International Media
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nova and International is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nova Vision Acquisition and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media and Nova Vision 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 Nova Vision Acquisition are associated (or correlated) with International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Nova Vision i.e., Nova Vision and International Media go up and down completely randomly.
Pair Corralation between Nova Vision and International Media
Assuming the 90 days horizon Nova Vision Acquisition is expected to generate 1.76 times more return on investment than International Media. However, Nova Vision is 1.76 times more volatile than International Media Acquisition. It trades about 0.12 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.08 per unit of risk. If you would invest 15.00 in Nova Vision Acquisition on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Nova Vision Acquisition or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.34% |
| Values | Daily Returns |
Nova Vision Acquisition vs. International Media Acquisitio
Performance |
| Timeline |
| Nova Vision Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nova Vision and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Vision and International Media
The main advantage of trading using opposite Nova Vision and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Vision position performs unexpectedly, International 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 International Media will offset losses from the drop in International Media's long position.The idea behind Nova Vision Acquisition and International Media Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| International Media vs. Old Dominion Freight | International Media vs. CDW Corp | International Media vs. Verra Mobility Corp | International Media vs. Hooker Furniture |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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