Correlation Between Goodfellow and Network Media

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

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

Diversification Opportunities for Goodfellow and Network Media

-0.15

Correlation Coefficient

Goodfellow  Network Media

Good diversification

The 3 months correlation between Goodfellow and Network is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Goodfellow and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media Group and Goodfellow 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 Goodfellow are associated (or correlated) with Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of Goodfellow i.e., Goodfellow and Network Media go up and down completely randomly.

Pair Corralation between Goodfellow and Network Media

Assuming the 90 days trading horizon Goodfellow is expected to under-perform the Network Media. But the stock apears to be less risky and, when comparing its historical volatility, Goodfellow is 2.39 times less risky than Network Media. The stock trades about -0.07 of its potential returns per unit of risk. The Network Media Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Network Media Group on December 24, 2024 and sell it today you would earn a total of  0.00  from holding Network Media Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Goodfellow  vs.  Network Media Group

Goodfellow

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goodfellow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Network Media Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Network Media Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Network Media is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goodfellow and Network Media

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

The idea behind Goodfellow and Network Media Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.