Correlation Between Entravision Communications and BEXIMCO PHARMAGDR

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

By analyzing existing cross correlation between Entravision Communications and BEXIMCO PHARMAGDR REGS, you can compare the effects of market volatilities on Entravision Communications and BEXIMCO PHARMAGDR 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 BEXIMCO PHARMAGDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and BEXIMCO PHARMAGDR.

Diversification Opportunities for Entravision Communications and BEXIMCO PHARMAGDR

0.59

Correlation Coefficient

Entravision Communications  BEXIMCO PHARMAGDR

Very weak diversification

The 3 months correlation between Entravision and BEXIMCO is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and BEXIMCO PHARMAGDR REGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEXIMCO PHARMAGDR REGS 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 BEXIMCO PHARMAGDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEXIMCO PHARMAGDR REGS has no effect on the direction of Entravision Communications i.e., Entravision Communications and BEXIMCO PHARMAGDR go up and down completely randomly.

Pair Corralation between Entravision Communications and BEXIMCO PHARMAGDR

Assuming the 90 days horizon Entravision Communications is expected to generate 1.86 times less return on investment than BEXIMCO PHARMAGDR. In addition to that, Entravision Communications is 1.57 times more volatile than BEXIMCO PHARMAGDR REGS. It trades about 0.06 of its total potential returns per unit of risk. BEXIMCO PHARMAGDR REGS is currently generating about 0.18 per unit of volatility. If you would invest  31.00  in BEXIMCO PHARMAGDR REGS on October 27, 2024 and sell it today you would earn a total of  11.00  from holding BEXIMCO PHARMAGDR REGS or generate 35.48% return on investment over 90 days.

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

Entravision Communications  vs.  BEXIMCO PHARMAGDR REGS

Entravision Communications

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Entravision Communications reported solid returns over the last few months and may actually be approaching a breakup point.

BEXIMCO PHARMAGDR REGS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BEXIMCO PHARMAGDR REGS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BEXIMCO PHARMAGDR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entravision Communications and BEXIMCO PHARMAGDR

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

The idea behind Entravision Communications and BEXIMCO PHARMAGDR REGS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..