Correlation Between AcadeMedia and Made Tech

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

By analyzing existing cross correlation between AcadeMedia AB and Made Tech Group, you can compare the effects of market volatilities on AcadeMedia and Made Tech 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 AcadeMedia with a short position of Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Made Tech.

Diversification Opportunities for AcadeMedia and Made Tech

-0.01

Correlation Coefficient

AcadeMedia  Made Tech

Good diversification

The 3 months correlation between AcadeMedia and Made is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of AcadeMedia i.e., AcadeMedia and Made Tech go up and down completely randomly.

Pair Corralation between AcadeMedia and Made Tech

Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.34 times more return on investment than Made Tech. However, AcadeMedia AB is 2.96 times less risky than Made Tech. It trades about 0.06 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.01 per unit of risk. If you would invest  4,651  in AcadeMedia AB on October 5, 2024 and sell it today you would earn a total of  2,134  from holding AcadeMedia AB or generate 45.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.78%
Values	Daily Returns

AcadeMedia AB  vs.  Made Tech Group

AcadeMedia AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AcadeMedia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Made Tech Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Made Tech Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Made Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AcadeMedia and Made Tech

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

The idea behind AcadeMedia AB and Made Tech Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.