Correlation Between Adcore and ARHT Media

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

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

Diversification Opportunities for Adcore and ARHT Media

0.33

Correlation Coefficient

Adcore  ARHT Media

Weak diversification

The 3 months correlation between Adcore and ARHT is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Adcore Inc and ARHT Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARHT Media and Adcore 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 Adcore Inc are associated (or correlated) with ARHT Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARHT Media has no effect on the direction of Adcore i.e., Adcore and ARHT Media go up and down completely randomly.

Pair Corralation between Adcore and ARHT Media

Assuming the 90 days horizon Adcore Inc is expected to generate 0.7 times more return on investment than ARHT Media. However, Adcore Inc is 1.43 times less risky than ARHT Media. It trades about -0.02 of its potential returns per unit of risk. ARHT Media is currently generating about -0.09 per unit of risk. If you would invest  14.00  in Adcore Inc on September 3, 2024 and sell it today you would lose (2.00) from holding Adcore Inc or give up 14.29% of portfolio value over 90 days.

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

Adcore Inc  vs.  ARHT Media

Adcore Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adcore Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ARHT Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARHT Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Adcore and ARHT Media

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

The idea behind Adcore Inc and ARHT Media 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.