Correlation Between Bloomsbury Publishing and AcadeMedia

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

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

Diversification Opportunities for Bloomsbury Publishing and AcadeMedia

0.09

Correlation Coefficient

Bloomsbury Publishing  AcadeMedia

Significant diversification

The 3 months correlation between Bloomsbury and AcadeMedia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and AcadeMedia go up and down completely randomly.

Pair Corralation between Bloomsbury Publishing and AcadeMedia

Assuming the 90 days trading horizon Bloomsbury Publishing is expected to generate 3.15 times less return on investment than AcadeMedia. In addition to that, Bloomsbury Publishing is 1.14 times more volatile than AcadeMedia AB. It trades about 0.06 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about 0.23 per unit of volatility. If you would invest  6,470  in AcadeMedia AB on October 8, 2024 and sell it today you would earn a total of  340.00  from holding AcadeMedia AB or generate 5.26% return on investment over 90 days.

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

Bloomsbury Publishing Plc  vs.  AcadeMedia AB

Bloomsbury Publishing Plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloomsbury Publishing Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Bloomsbury Publishing is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Bloomsbury Publishing and AcadeMedia

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

The idea behind Bloomsbury Publishing Plc and AcadeMedia AB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.