Correlation Between IHeartMedia and TV Azteca

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

By analyzing existing cross correlation between iHeartMedia and TV Azteca SAB, you can compare the effects of market volatilities on IHeartMedia and TV Azteca 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 TV Azteca. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHeartMedia and TV Azteca.

Diversification Opportunities for IHeartMedia and TV Azteca

0.0

Correlation Coefficient

IHeartMedia  TV Azteca

Pay attention - limited upside

The 3 months correlation between IHeartMedia and AZTEF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iHeartMedia and TV Azteca SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Azteca SAB 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 are associated (or correlated) with TV Azteca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Azteca SAB has no effect on the direction of IHeartMedia i.e., IHeartMedia and TV Azteca go up and down completely randomly.

Pair Corralation between IHeartMedia and TV Azteca

If you would invest  150.00  in iHeartMedia on September 3, 2024 and sell it today you would earn a total of  30.00  from holding iHeartMedia or generate 20.0% return on investment over 90 days.

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

iHeartMedia  vs.  TV Azteca SAB

iHeartMedia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iHeartMedia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IHeartMedia sustained solid returns over the last few months and may actually be approaching a breakup point.

TV Azteca SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TV Azteca SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, TV Azteca is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IHeartMedia and TV Azteca

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

The idea behind iHeartMedia and TV Azteca SAB 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.