Correlation Between International Media and KLDiscovery

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

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

Diversification Opportunities for International Media and KLDiscovery

-0.71

Correlation Coefficient

International Media  KLDiscovery

Pay attention - limited upside

The 3 months correlation between International and KLDiscovery is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and KLDiscovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLDiscovery and International 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 International Media Acquisition are associated (or correlated) with KLDiscovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLDiscovery has no effect on the direction of International Media i.e., International Media and KLDiscovery go up and down completely randomly.

Pair Corralation between International Media and KLDiscovery

If you would invest  300.00  in KLDiscovery on October 9, 2024 and sell it today you would earn a total of  0.00  from holding KLDiscovery or generate 0.0% return on investment over 90 days.

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

International Media Acquisitio  vs.  KLDiscovery

International Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Media Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Media is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

KLDiscovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLDiscovery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, KLDiscovery is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with International Media and KLDiscovery

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

The idea behind International Media Acquisition and KLDiscovery 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.