Correlation Between ATRESMEDIA and Corporate Office
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA and Corporate Office 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 Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and Corporate Office Properties, you can compare the effects of market volatilities on ATRESMEDIA and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and Corporate Office.
Diversification Opportunities for ATRESMEDIA and Corporate Office
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATRESMEDIA and Corporate is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and Corporate Office go up and down completely randomly.
Pair Corralation between ATRESMEDIA and Corporate Office
Assuming the 90 days trading horizon ATRESMEDIA is expected to under-perform the Corporate Office. But the stock apears to be less risky and, when comparing its historical volatility, ATRESMEDIA is 1.53 times less risky than Corporate Office. The stock trades about -0.08 of its potential returns per unit of risk. The Corporate Office Properties is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,940 in Corporate Office Properties on August 25, 2024 and sell it today you would lose (40.00) from holding Corporate Office Properties or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ATRESMEDIA vs. Corporate Office Properties
Performance |
| Timeline |
| ATRESMEDIA |
| Corporate Office Pro |
ATRESMEDIA and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and Corporate Office
The main advantage of trading using opposite ATRESMEDIA and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.The idea behind ATRESMEDIA and Corporate Office Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Corporate Office vs. CHINA EDUCATION GROUP | Corporate Office vs. SWISS WATER DECAFFCOFFEE | Corporate Office vs. Xinhua Winshare Publishing | Corporate Office vs. TAL Education Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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