Correlation Between Atresmedia Corporacin and Elaia Investment

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

By analyzing existing cross correlation between Atresmedia Corporacin de and Elaia Investment Spain, you can compare the effects of market volatilities on Atresmedia Corporacin and Elaia Investment 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 Corporacin with a short position of Elaia Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atresmedia Corporacin and Elaia Investment.

Diversification Opportunities for Atresmedia Corporacin and Elaia Investment

-0.25

Correlation Coefficient

Atresmedia Corporacin  Elaia Investment

Very good diversification

The 3 months correlation between Atresmedia and Elaia is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Atresmedia Corporacin de and Elaia Investment Spain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elaia Investment Spain and Atresmedia Corporacin 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 Corporacin de are associated (or correlated) with Elaia Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elaia Investment Spain has no effect on the direction of Atresmedia Corporacin i.e., Atresmedia Corporacin and Elaia Investment go up and down completely randomly.

Pair Corralation between Atresmedia Corporacin and Elaia Investment

Assuming the 90 days trading horizon Atresmedia Corporacin de is expected to generate 0.16 times more return on investment than Elaia Investment. However, Atresmedia Corporacin de is 6.36 times less risky than Elaia Investment. It trades about 0.11 of its potential returns per unit of risk. Elaia Investment Spain is currently generating about -0.24 per unit of risk. If you would invest  434.00  in Atresmedia Corporacin de on October 23, 2024 and sell it today you would earn a total of  8.00  from holding Atresmedia Corporacin de or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Atresmedia Corporacin de  vs.  Elaia Investment Spain

Atresmedia Corporacin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atresmedia Corporacin de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Atresmedia Corporacin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Elaia Investment Spain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elaia Investment Spain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Atresmedia Corporacin and Elaia Investment

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

The idea behind Atresmedia Corporacin de and Elaia Investment Spain 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.