Correlation Between ATRESMEDIA and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA and Beijing MediaLimited 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 ATRESMEDIA and Beijing MediaLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and Beijing Media, you can compare the effects of market volatilities on ATRESMEDIA and Beijing MediaLimited 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 ATRESMEDIA with a short position of Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and Beijing MediaLimited.
Diversification Opportunities for ATRESMEDIA and Beijing MediaLimited
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ATRESMEDIA and Beijing is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited and ATRESMEDIA 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 ATRESMEDIA are associated (or correlated) with Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between ATRESMEDIA and Beijing MediaLimited
Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 0.24 times more return on investment than Beijing MediaLimited. However, ATRESMEDIA is 4.11 times less risky than Beijing MediaLimited. It trades about 0.08 of its potential returns per unit of risk. Beijing Media is currently generating about 0.01 per unit of risk. If you would invest 343.00 in ATRESMEDIA on September 2, 2024 and sell it today you would earn a total of 106.00 from holding ATRESMEDIA or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRESMEDIA vs. Beijing Media
Performance |
| Timeline |
| ATRESMEDIA |
| Beijing MediaLimited |
ATRESMEDIA and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and Beijing MediaLimited
The main advantage of trading using opposite ATRESMEDIA and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| ATRESMEDIA vs. SIVERS SEMICONDUCTORS AB | ATRESMEDIA vs. Darden Restaurants | ATRESMEDIA vs. Reliance Steel Aluminum | ATRESMEDIA vs. Q2M Managementberatung AG |
| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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