Correlation Between Cox ABG and Media Investment

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

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

Diversification Opportunities for Cox ABG and Media Investment

0.52

Correlation Coefficient

Cox ABG  Media Investment

Very weak diversification

The 3 months correlation between Cox and Media is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cox ABG Group and Media Investment Optimization in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Investment Opt and Cox ABG 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 Cox ABG Group are associated (or correlated) with Media Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Investment Opt has no effect on the direction of Cox ABG i.e., Cox ABG and Media Investment go up and down completely randomly.

Pair Corralation between Cox ABG and Media Investment

Assuming the 90 days trading horizon Cox ABG Group is expected to generate 1.93 times more return on investment than Media Investment. However, Cox ABG is 1.93 times more volatile than Media Investment Optimization. It trades about -0.02 of its potential returns per unit of risk. Media Investment Optimization is currently generating about -0.23 per unit of risk. If you would invest  958.00  in Cox ABG Group on December 29, 2024 and sell it today you would lose (32.00) from holding Cox ABG Group or give up 3.34% of portfolio value over 90 days.

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

Cox ABG Group  vs.  Media Investment Optimization

Cox ABG Group

Risk-Adjusted Performance

Very Weak

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

Media Investment Opt

Risk-Adjusted Performance

Very Weak

Over the last 90 days Media Investment Optimization 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 basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cox ABG and Media Investment

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

The idea behind Cox ABG Group and Media Investment Optimization 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.