Correlation Between Bank Central and IDW Media
Can any of the company-specific risk be diversified away by investing in both Bank Central and IDW 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 Bank Central and IDW Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and IDW Media Holdings, you can compare the effects of market volatilities on Bank Central and IDW 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 Bank Central with a short position of IDW Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and IDW Media.
Diversification Opportunities for Bank Central and IDW Media
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and IDW is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and IDW Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDW Media Holdings and Bank Central 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 Bank Central Asia are associated (or correlated) with IDW Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDW Media Holdings has no effect on the direction of Bank Central i.e., Bank Central and IDW Media go up and down completely randomly.
Pair Corralation between Bank Central and IDW Media
Assuming the 90 days horizon Bank Central is expected to generate 5.12 times less return on investment than IDW Media. But when comparing it to its historical volatility, Bank Central Asia is 3.69 times less risky than IDW Media. It trades about 0.02 of its potential returns per unit of risk. IDW Media Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 53.00 in IDW Media Holdings on September 4, 2024 and sell it today you would earn a total of 0.00 from holding IDW Media Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.53% |
| Values | Daily Returns |
Bank Central Asia vs. IDW Media Holdings
Performance |
| Timeline |
| Bank Central Asia |
| IDW Media Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and IDW Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and IDW Media
The main advantage of trading using opposite Bank Central and IDW Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, IDW 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 IDW Media will offset losses from the drop in IDW Media's long position.| Bank Central vs. First Hawaiian | Bank Central vs. Central Pacific Financial | Bank Central vs. Territorial Bancorp | Bank Central vs. Comerica |
| IDW Media vs. Legible | IDW Media vs. FP Newspapers | IDW Media vs. Pearson PLC ADR | IDW Media vs. John Wiley Sons |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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