Correlation Between EMedia Holdings and Avi
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and Avi 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 EMedia Holdings and Avi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMedia Holdings Limited and Avi, you can compare the effects of market volatilities on EMedia Holdings and Avi 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 EMedia Holdings with a short position of Avi. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and Avi.
Diversification Opportunities for EMedia Holdings and Avi
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EMedia and Avi is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and Avi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avi and EMedia Holdings 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 eMedia Holdings Limited are associated (or correlated) with Avi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avi has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and Avi go up and down completely randomly.
Pair Corralation between EMedia Holdings and Avi
Assuming the 90 days trading horizon eMedia Holdings Limited is expected to generate 4.2 times more return on investment than Avi. However, EMedia Holdings is 4.2 times more volatile than Avi. It trades about 0.23 of its potential returns per unit of risk. Avi is currently generating about 0.01 per unit of risk. If you would invest 31,100 in eMedia Holdings Limited on September 25, 2024 and sell it today you would earn a total of 4,900 from holding eMedia Holdings Limited or generate 15.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
eMedia Holdings Limited vs. Avi
Performance |
Timeline |
eMedia Holdings |
Avi |
EMedia Holdings and Avi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EMedia Holdings and Avi
The main advantage of trading using opposite EMedia Holdings and Avi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, Avi 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 Avi will offset losses from the drop in Avi's long position.EMedia Holdings vs. Zeder Investments | EMedia Holdings vs. Brimstone Investment | EMedia Holdings vs. Boxer Retail | EMedia Holdings vs. Capitec Bank Holdings |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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