Correlation Between E Media and CoreShares TotalWldStock

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

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

Diversification Opportunities for E Media and CoreShares TotalWldStock

0.17

Correlation Coefficient

E Media  CoreShares TotalWldStock

Average diversification

The 3 months correlation between EMH and CoreShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding E Media Holdings and CoreShares TotalWldStock ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares TotalWldStock and E Media 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 E Media Holdings are associated (or correlated) with CoreShares TotalWldStock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares TotalWldStock has no effect on the direction of E Media i.e., E Media and CoreShares TotalWldStock go up and down completely randomly.

Pair Corralation between E Media and CoreShares TotalWldStock

Assuming the 90 days trading horizon E Media Holdings is expected to generate 49.93 times more return on investment than CoreShares TotalWldStock. However, E Media is 49.93 times more volatile than CoreShares TotalWldStock ETF. It trades about 0.04 of its potential returns per unit of risk. CoreShares TotalWldStock ETF is currently generating about 0.08 per unit of risk. If you would invest  37,732  in E Media Holdings on October 7, 2024 and sell it today you would lose (2,232) from holding E Media Holdings or give up 5.92% of portfolio value over 90 days.

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

E Media Holdings  vs.  CoreShares TotalWldStock ETF

E Media Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in E Media Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, E Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CoreShares TotalWldStock

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares TotalWldStock ETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, CoreShares TotalWldStock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with E Media and CoreShares TotalWldStock

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

The idea behind E Media Holdings and CoreShares TotalWldStock ETF 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.