Correlation Between Optima Health and Everyman Media
Can any of the company-specific risk be diversified away by investing in both Optima Health and Everyman 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 Optima Health and Everyman Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Everyman Media Group, you can compare the effects of market volatilities on Optima Health and Everyman 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 Optima Health with a short position of Everyman Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Everyman Media.
Diversification Opportunities for Optima Health and Everyman Media
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Optima and Everyman is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Everyman Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everyman Media Group and Optima Health 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 Optima Health plc are associated (or correlated) with Everyman Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everyman Media Group has no effect on the direction of Optima Health i.e., Optima Health and Everyman Media go up and down completely randomly.
Pair Corralation between Optima Health and Everyman Media
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Everyman Media. In addition to that, Optima Health is 1.37 times more volatile than Everyman Media Group. It trades about -0.34 of its total potential returns per unit of risk. Everyman Media Group is currently generating about -0.33 per unit of volatility. If you would invest 5,500 in Everyman Media Group on September 4, 2024 and sell it today you would lose (200.00) from holding Everyman Media Group or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Optima Health plc vs. Everyman Media Group
Performance |
| Timeline |
| Optima Health plc |
| Everyman Media Group |
Optima Health and Everyman Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Everyman Media
The main advantage of trading using opposite Optima Health and Everyman Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Everyman 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 Everyman Media will offset losses from the drop in Everyman Media's long position.| Optima Health vs. Toyota Motor Corp | Optima Health vs. SoftBank Group Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Las Vegas Sands |
| Everyman Media vs. Gaming Realms plc | Everyman Media vs. Leroy Seafood Group | Everyman Media vs. Edita Food Industries | Everyman Media vs. Sligro Food 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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