Correlation Between Seven West and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Seven West and AiMedia Technologies 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 Seven West and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven West Media and AiMedia Technologies, you can compare the effects of market volatilities on Seven West and AiMedia Technologies 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 Seven West with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven West and AiMedia Technologies.
Diversification Opportunities for Seven West and AiMedia Technologies
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seven and AiMedia is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seven West Media and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Seven West 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 Seven West Media are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Seven West i.e., Seven West and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Seven West and AiMedia Technologies
Assuming the 90 days trading horizon Seven West Media is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Seven West Media is 1.33 times less risky than AiMedia Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 34.00 in AiMedia Technologies on August 26, 2024 and sell it today you would earn a total of 37.00 from holding AiMedia Technologies or generate 108.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven West Media vs. AiMedia Technologies
Performance |
| Timeline |
| Seven West Media |
| AiMedia Technologies |
Seven West and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven West and AiMedia Technologies
The main advantage of trading using opposite Seven West and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven West position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Seven West vs. Gtn | Seven West vs. Dynamic Drill And | Seven West vs. Insignia Financial | Seven West vs. G8 Education |
| AiMedia Technologies vs. Carnegie Clean Energy | AiMedia Technologies vs. Alto Metals | AiMedia Technologies vs. Eagle Mountain Mining | AiMedia Technologies vs. Aurelia Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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