Correlation Between Paramount Communications and Entertainment Network
Specify exactly 2 symbols:
By analyzing existing cross correlation between Paramount Communications Limited and Entertainment Network Limited, you can compare the effects of market volatilities on Paramount Communications and Entertainment Network 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 Communications with a short position of Entertainment Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Communications and Entertainment Network.
Diversification Opportunities for Paramount Communications and Entertainment Network
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Paramount and Entertainment is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Communications Limit and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network and Paramount Communications 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 Communications Limited are associated (or correlated) with Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of Paramount Communications i.e., Paramount Communications and Entertainment Network go up and down completely randomly.
Pair Corralation between Paramount Communications and Entertainment Network
Assuming the 90 days trading horizon Paramount Communications Limited is expected to generate 1.01 times more return on investment than Entertainment Network. However, Paramount Communications is 1.01 times more volatile than Entertainment Network Limited. It trades about 0.05 of its potential returns per unit of risk. Entertainment Network Limited is currently generating about 0.02 per unit of risk. If you would invest 4,010 in Paramount Communications Limited on October 16, 2024 and sell it today you would earn a total of 3,317 from holding Paramount Communications Limited or generate 82.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.38% |
| Values | Daily Returns |
Paramount Communications Limit vs. Entertainment Network Limited
Performance |
| Timeline |
| Paramount Communications |
| Entertainment Network |
Paramount Communications and Entertainment Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Communications and Entertainment Network
The main advantage of trading using opposite Paramount Communications and Entertainment Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Communications position performs unexpectedly, Entertainment Network 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 Entertainment Network will offset losses from the drop in Entertainment Network's long position.The idea behind Paramount Communications Limited and Entertainment Network Limited 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.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| CEOs Directory Screen CEOs from public companies around the world |