Correlation Between Goodbye Kansas and AcadeMedia

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

By analyzing existing cross correlation between Goodbye Kansas Group and AcadeMedia AB, you can compare the effects of market volatilities on Goodbye Kansas and AcadeMedia 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 Goodbye Kansas with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodbye Kansas and AcadeMedia.

Diversification Opportunities for Goodbye Kansas and AcadeMedia

0.32

Correlation Coefficient

Goodbye Kansas  AcadeMedia

Weak diversification

The 3 months correlation between Goodbye and AcadeMedia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Goodbye Kansas 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 Goodbye Kansas Group are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Goodbye Kansas i.e., Goodbye Kansas and AcadeMedia go up and down completely randomly.

Pair Corralation between Goodbye Kansas and AcadeMedia

If you would invest  6,480  in AcadeMedia AB on October 8, 2024 and sell it today you would earn a total of  240.00  from holding AcadeMedia AB or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	6.25%
Values	Daily Returns

Goodbye Kansas Group  vs.  AcadeMedia AB

Goodbye Kansas Group

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Goodbye Kansas Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak forward-looking signals, Goodbye Kansas unveiled solid returns over the last few months and may actually be approaching a breakup point.

AcadeMedia AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AcadeMedia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goodbye Kansas and AcadeMedia

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

The idea behind Goodbye Kansas Group and AcadeMedia AB 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.