Correlation Between Fuji Media and ATRESMEDIA

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

By analyzing existing cross correlation between Fuji Media Holdings and ATRESMEDIA, you can compare the effects of market volatilities on Fuji Media and ATRESMEDIA 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 Fuji Media with a short position of ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and ATRESMEDIA.

Diversification Opportunities for Fuji Media and ATRESMEDIA

0.19

Correlation Coefficient

Fuji Media  ATRESMEDIA

Average diversification

The 3 months correlation between Fuji and ATRESMEDIA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA and Fuji Media 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 Fuji Media Holdings are associated (or correlated) with ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of Fuji Media i.e., Fuji Media and ATRESMEDIA go up and down completely randomly.

Pair Corralation between Fuji Media and ATRESMEDIA

Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 2.04 times more return on investment than ATRESMEDIA. However, Fuji Media is 2.04 times more volatile than ATRESMEDIA. It trades about 0.15 of its potential returns per unit of risk. ATRESMEDIA is currently generating about 0.04 per unit of risk. If you would invest  990.00  in Fuji Media Holdings on October 25, 2024 and sell it today you would earn a total of  200.00  from holding Fuji Media Holdings or generate 20.2% return on investment over 90 days.

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

Fuji Media Holdings  vs.  ATRESMEDIA

Fuji Media Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Media Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Fuji Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

ATRESMEDIA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATRESMEDIA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ATRESMEDIA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fuji Media and ATRESMEDIA

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

The idea behind Fuji Media Holdings and ATRESMEDIA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.