Correlation Between One Media and Baker Steel
Can any of the company-specific risk be diversified away by investing in both One Media and Baker Steel 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 One Media and Baker Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Baker Steel Resources, you can compare the effects of market volatilities on One Media and Baker Steel 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 One Media with a short position of Baker Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Baker Steel.
Diversification Opportunities for One Media and Baker Steel
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between One and Baker is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP and Baker Steel Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Steel Resources and One 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 One Media iP are associated (or correlated) with Baker Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Steel Resources has no effect on the direction of One Media i.e., One Media and Baker Steel go up and down completely randomly.
Pair Corralation between One Media and Baker Steel
Assuming the 90 days trading horizon One Media iP is expected to generate 1.38 times more return on investment than Baker Steel. However, One Media is 1.38 times more volatile than Baker Steel Resources. It trades about -0.04 of its potential returns per unit of risk. Baker Steel Resources is currently generating about -0.29 per unit of risk. If you would invest 425.00 in One Media iP on November 29, 2024 and sell it today you would lose (10.00) from holding One Media iP or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Media iP vs. Baker Steel Resources
Performance |
| Timeline |
| One Media iP |
| Baker Steel Resources |
One Media and Baker Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Baker Steel
The main advantage of trading using opposite One Media and Baker Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media position performs unexpectedly, Baker Steel 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 Baker Steel will offset losses from the drop in Baker Steel's long position.| One Media vs. Silvercorp Metals | One Media vs. Fulcrum Metals PLC | One Media vs. Universal Music Group | One Media vs. Evolution Gaming Group |
| Baker Steel vs. Symphony Environmental Technologies | Baker Steel vs. Batm Advanced Communications | Baker Steel vs. Impax Environmental Markets | Baker Steel vs. Gamma Communications 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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