Correlation Between AFW and MediaZen

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

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

Diversification Opportunities for AFW and MediaZen

0.0

Correlation Coefficient

AFW  MediaZen

Pay attention - limited upside

The 3 months correlation between AFW and MediaZen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AFW Co and MediaZen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaZen and AFW 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 AFW Co are associated (or correlated) with MediaZen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaZen has no effect on the direction of AFW i.e., AFW and MediaZen go up and down completely randomly.

Pair Corralation between AFW and MediaZen

If you would invest  132,900  in AFW Co on December 2, 2024 and sell it today you would lose (3,500) from holding AFW Co or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

AFW Co  vs.  MediaZen

AFW Co

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AFW Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AFW sustained solid returns over the last few months and may actually be approaching a breakup point.

MediaZen

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AFW and MediaZen

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

The idea behind AFW Co and MediaZen 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.