Correlation Between BBB Foods and International Media
Can any of the company-specific risk be diversified away by investing in both BBB Foods and International 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 BBB Foods and International Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and International Media Acquisition, you can compare the effects of market volatilities on BBB Foods and International 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 BBB Foods with a short position of International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and International Media.
Diversification Opportunities for BBB Foods and International Media
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BBB and International is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media and BBB Foods 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 BBB Foods are associated (or correlated) with International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of BBB Foods i.e., BBB Foods and International Media go up and down completely randomly.
Pair Corralation between BBB Foods and International Media
Given the investment horizon of 90 days BBB Foods is expected to generate 24.26 times less return on investment than International Media. But when comparing it to its historical volatility, BBB Foods is 24.89 times less risky than International Media. It trades about 0.09 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4.00 in International Media Acquisition on September 2, 2024 and sell it today you would earn a total of 2.00 from holding International Media Acquisition or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.95% |
| Values | Daily Returns |
BBB Foods vs. International Media Acquisitio
Performance |
| Timeline |
| BBB Foods |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BBB Foods and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and International Media
The main advantage of trading using opposite BBB Foods and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, International 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 International Media will offset losses from the drop in International Media's long position.| BBB Foods vs. Ingles Markets Incorporated | BBB Foods vs. Grocery Outlet Holding | BBB Foods vs. Ocado Group plc | BBB Foods vs. Sprouts Farmers Market |
| International Media vs. Kaiser Aluminum | International Media vs. WEC Energy Group | International Media vs. CenterPoint Energy | International Media vs. Summit Environmental |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |