Correlation Between Entravision Communications and Fielmann Aktiengesellscha

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

By analyzing existing cross correlation between Entravision Communications and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on Entravision Communications and Fielmann Aktiengesellscha 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 Entravision Communications with a short position of Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Fielmann Aktiengesellscha.

Diversification Opportunities for Entravision Communications and Fielmann Aktiengesellscha

-0.8

Correlation Coefficient

Entravision Communications  Fielmann Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Entravision and Fielmann is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha and Entravision Communications 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 Entravision Communications are associated (or correlated) with Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of Entravision Communications i.e., Entravision Communications and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between Entravision Communications and Fielmann Aktiengesellscha

Assuming the 90 days horizon Entravision Communications is expected to under-perform the Fielmann Aktiengesellscha. In addition to that, Entravision Communications is 3.1 times more volatile than Fielmann Aktiengesellschaft. It trades about -0.01 of its total potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about 0.03 per unit of volatility. If you would invest  3,484  in Fielmann Aktiengesellschaft on October 3, 2024 and sell it today you would earn a total of  626.00  from holding Fielmann Aktiengesellschaft or generate 17.97% return on investment over 90 days.

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

Entravision Communications  vs.  Fielmann Aktiengesellschaft

Entravision Communications

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Entravision Communications reported solid returns over the last few months and may actually be approaching a breakup point.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Entravision Communications and Fielmann Aktiengesellscha

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

The idea behind Entravision Communications and Fielmann Aktiengesellschaft 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.