Correlation Between Entravision Communications and AcuityAds Holdings

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

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

Diversification Opportunities for Entravision Communications and AcuityAds Holdings

0.0

Correlation Coefficient

Entravision Communications  AcuityAds Holdings

Pay attention - limited upside

The 3 months correlation between Entravision and AcuityAds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and AcuityAds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcuityAds Holdings 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 AcuityAds Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcuityAds Holdings has no effect on the direction of Entravision Communications i.e., Entravision Communications and AcuityAds Holdings go up and down completely randomly.

Pair Corralation between Entravision Communications and AcuityAds Holdings

If you would invest (100.00) in AcuityAds Holdings on December 5, 2024 and sell it today you would earn a total of  100.00  from holding AcuityAds Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Entravision Communications  vs.  AcuityAds Holdings

Entravision Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entravision Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

AcuityAds Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days AcuityAds Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, AcuityAds Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Entravision Communications and AcuityAds Holdings

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

The idea behind Entravision Communications and AcuityAds Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.