Correlation Between POWER METALS and Media
Can any of the company-specific risk be diversified away by investing in both POWER METALS 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 POWER METALS and Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POWER METALS and Media and Games, you can compare the effects of market volatilities on POWER METALS 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 POWER METALS with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWER METALS and Media.
Diversification Opportunities for POWER METALS and Media
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POWER and Media is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding POWER METALS 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 POWER METALS 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 POWER METALS 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 POWER METALS i.e., POWER METALS and Media go up and down completely randomly.
Pair Corralation between POWER METALS and Media
Assuming the 90 days trading horizon POWER METALS is expected to generate 1.49 times less return on investment than Media. In addition to that, POWER METALS is 1.26 times more volatile than Media and Games. It trades about 0.08 of its total potential returns per unit of risk. Media and Games is currently generating about 0.15 per unit of volatility. If you would invest 92.00 in Media and Games on November 3, 2024 and sell it today you would earn a total of 237.00 from holding Media and Games or generate 257.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POWER METALS vs. Media and Games
Performance |
| Timeline |
| POWER METALS |
| Media and Games |
POWER METALS and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWER METALS and Media
The main advantage of trading using opposite POWER METALS and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWER METALS 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.| POWER METALS vs. INFORMATION SVC GRP | POWER METALS vs. Extra Space Storage | POWER METALS vs. PURE FOODS TASMANIA | POWER METALS vs. MICRONIC MYDATA |
| Media vs. GALENA MINING LTD | Media vs. FIREWEED METALS P | Media vs. Jacquet Metal Service | Media vs. UNIVMUSIC GRPADR050 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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