Correlation Between Entravision Communications and KAISER

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

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

Diversification Opportunities for Entravision Communications and KAISER

-0.13

Correlation Coefficient

Entravision Communications  KAISER

Good diversification

The 3 months correlation between Entravision and KAISER is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and KAISER FOUNDATION HOSPITALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAISER FOUNDATION 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 KAISER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAISER FOUNDATION has no effect on the direction of Entravision Communications i.e., Entravision Communications and KAISER go up and down completely randomly.

Pair Corralation between Entravision Communications and KAISER

Considering the 90-day investment horizon Entravision Communications is expected to under-perform the KAISER. In addition to that, Entravision Communications is 6.31 times more volatile than KAISER FOUNDATION HOSPITALS. It trades about -0.01 of its total potential returns per unit of risk. KAISER FOUNDATION HOSPITALS is currently generating about 0.09 per unit of volatility. If you would invest  6,907  in KAISER FOUNDATION HOSPITALS on December 25, 2024 and sell it today you would earn a total of  252.00  from holding KAISER FOUNDATION HOSPITALS or generate 3.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.14%
Values	Daily Returns

Entravision Communications  vs.  KAISER FOUNDATION HOSPITALS

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 rather sound basic indicators, Entravision Communications is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

KAISER FOUNDATION

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KAISER FOUNDATION HOSPITALS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KAISER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Entravision Communications and KAISER

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

The idea behind Entravision Communications and KAISER FOUNDATION HOSPITALS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.