Correlation Between Salon Media and Theglobe
Can any of the company-specific risk be diversified away by investing in both Salon Media and Theglobe 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 Salon Media and Theglobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salon Media Group and theglobe, you can compare the effects of market volatilities on Salon Media and Theglobe 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 Salon Media with a short position of Theglobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salon Media and Theglobe.
Diversification Opportunities for Salon Media and Theglobe
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salon and Theglobe is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Salon Media Group and theglobe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on theglobe and Salon 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 Salon Media Group are associated (or correlated) with Theglobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of theglobe has no effect on the direction of Salon Media i.e., Salon Media and Theglobe go up and down completely randomly.
Pair Corralation between Salon Media and Theglobe
Given the investment horizon of 90 days Salon Media Group is expected to under-perform the Theglobe. In addition to that, Salon Media is 1.15 times more volatile than theglobe. It trades about -0.16 of its total potential returns per unit of risk. theglobe is currently generating about -0.06 per unit of volatility. If you would invest 39.00 in theglobe on August 30, 2024 and sell it today you would lose (16.00) from holding theglobe or give up 41.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Salon Media Group vs. theglobe
Performance |
| Timeline |
| Salon Media Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| theglobe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salon Media and Theglobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salon Media and Theglobe
The main advantage of trading using opposite Salon Media and Theglobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salon Media position performs unexpectedly, Theglobe 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 Theglobe will offset losses from the drop in Theglobe's long position.| Salon Media vs. IZEA Inc | Salon Media vs. Match Group | Salon Media vs. Zhihu Inc ADR | Salon Media vs. Weibo Corp |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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