Correlation Between TJ Media and Barunson Entertainment

Can any of the company-specific risk be diversified away by investing in both TJ Media and Barunson Entertainment 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 TJ Media and Barunson Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TJ media Co and Barunson Entertainment Arts, you can compare the effects of market volatilities on TJ Media and Barunson Entertainment 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 TJ Media with a short position of Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and Barunson Entertainment.

Diversification Opportunities for TJ Media and Barunson Entertainment

0.05

Correlation Coefficient

TJ Media  Barunson Entertainment

Significant diversification

The 3 months correlation between 032540 and Barunson is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment and TJ 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 TJ media Co are associated (or correlated) with Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of TJ Media i.e., TJ Media and Barunson Entertainment go up and down completely randomly.

Pair Corralation between TJ Media and Barunson Entertainment

Assuming the 90 days trading horizon TJ media Co is expected to generate 0.44 times more return on investment than Barunson Entertainment. However, TJ media Co is 2.25 times less risky than Barunson Entertainment. It trades about 0.14 of its potential returns per unit of risk. Barunson Entertainment Arts is currently generating about -0.02 per unit of risk. If you would invest  429,214  in TJ media Co on December 1, 2024 and sell it today you would earn a total of  42,786  from holding TJ media Co or generate 9.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TJ media Co  vs.  Barunson Entertainment Arts

TJ media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TJ media Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TJ Media may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Barunson Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barunson Entertainment Arts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Barunson Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TJ Media and Barunson Entertainment

The main advantage of trading using opposite TJ Media and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment's long position.

The idea behind TJ media Co and Barunson Entertainment Arts 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.