Correlation Between Paramount Global and Aftermaster
Can any of the company-specific risk be diversified away by investing in both Paramount Global and Aftermaster 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 Paramount Global and Aftermaster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Global Class and Aftermaster, you can compare the effects of market volatilities on Paramount Global and Aftermaster 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 Paramount Global with a short position of Aftermaster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and Aftermaster.
Diversification Opportunities for Paramount Global and Aftermaster
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Paramount and Aftermaster is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and Aftermaster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermaster and Paramount Global 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 Paramount Global Class are associated (or correlated) with Aftermaster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermaster has no effect on the direction of Paramount Global i.e., Paramount Global and Aftermaster go up and down completely randomly.
Pair Corralation between Paramount Global and Aftermaster
Assuming the 90 days horizon Paramount Global Class is expected to generate 0.52 times more return on investment than Aftermaster. However, Paramount Global Class is 1.91 times less risky than Aftermaster. It trades about 0.04 of its potential returns per unit of risk. Aftermaster is currently generating about -0.06 per unit of risk. If you would invest 1,818 in Paramount Global Class on November 9, 2024 and sell it today you would earn a total of 427.00 from holding Paramount Global Class or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Global Class vs. Aftermaster
Performance |
| Timeline |
| Paramount Global Class |
| Aftermaster |
Paramount Global and Aftermaster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Global and Aftermaster
The main advantage of trading using opposite Paramount Global and Aftermaster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global position performs unexpectedly, Aftermaster 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 Aftermaster will offset losses from the drop in Aftermaster's long position.| Paramount Global vs. Fox Corp Class | Paramount Global vs. News Corp A | Paramount Global vs. News Corp B | Paramount Global vs. Liberty Media |
| Aftermaster vs. American Picture House | Aftermaster vs. Anghami Warrants | Aftermaster vs. Maxx Sports TV |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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