Correlation Between Glacier Media and ADF

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Can any of the company-specific risk be diversified away by investing in both Glacier Media and ADF 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 Glacier Media and ADF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glacier Media and ADF Group, you can compare the effects of market volatilities on Glacier Media and ADF 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 Glacier Media with a short position of ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glacier Media and ADF.

Diversification Opportunities for Glacier Media and ADF

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Glacier and ADF is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Media and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group and Glacier 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 Glacier Media are associated (or correlated) with ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Glacier Media i.e., Glacier Media and ADF go up and down completely randomly.

Pair Corralation between Glacier Media and ADF

Assuming the 90 days trading horizon Glacier Media is expected to generate 2.78 times more return on investment than ADF. However, Glacier Media is 2.78 times more volatile than ADF Group. It trades about 0.1 of its potential returns per unit of risk. ADF Group is currently generating about -0.03 per unit of risk. If you would invest  12.00  in Glacier Media on October 8, 2024 and sell it today you would earn a total of  4.00  from holding Glacier Media or generate 33.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Glacier Media  vs.  ADF Group

 Performance 
       Timeline  
Glacier Media 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Glacier Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Glacier Media displayed solid returns over the last few months and may actually be approaching a breakup point.
ADF Group 

Risk-Adjusted Performance

0 of 100

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

Glacier Media and ADF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Glacier Media and ADF

The main advantage of trading using opposite Glacier Media and ADF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glacier Media position performs unexpectedly, ADF 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 ADF will offset losses from the drop in ADF's long position.
The idea behind Glacier Media and ADF 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.
Check out your portfolio center.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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