Correlation Between IHeartMedia and Fubotv

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

By analyzing existing cross correlation between iHeartMedia Class A and Fubotv Inc, you can compare the effects of market volatilities on IHeartMedia and Fubotv 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 IHeartMedia with a short position of Fubotv. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and Fubotv.

Diversification Opportunities for IHeartMedia and Fubotv

-0.33

Correlation Coefficient

IHeartMedia  Fubotv

Very good diversification

The 3 months correlation between IHeartMedia and Fubotv is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia Class A and Fubotv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubotv Inc and IHeartMedia 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 iHeartMedia Class A are associated (or correlated) with Fubotv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubotv Inc has no effect on the direction of IHeartMedia i.e., IHeartMedia and Fubotv go up and down completely randomly.

Pair Corralation between IHeartMedia and Fubotv

Given the investment horizon of 90 days iHeartMedia Class A is expected to generate 1.44 times more return on investment than Fubotv. However, IHeartMedia is 1.44 times more volatile than Fubotv Inc. It trades about 0.13 of its potential returns per unit of risk. Fubotv Inc is currently generating about 0.01 per unit of risk. If you would invest  150.00  in iHeartMedia Class A on September 3, 2024 and sell it today you would earn a total of  79.00  from holding iHeartMedia Class A or generate 52.67% return on investment over 90 days.

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

iHeartMedia Class A  vs.  Fubotv Inc

iHeartMedia Class

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iHeartMedia Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IHeartMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fubotv Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fubotv Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Fubotv is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IHeartMedia and Fubotv

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

The idea behind iHeartMedia Class A and Fubotv Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..