Correlation Between International Media and Launch One

Can any of the company-specific risk be diversified away by investing in both International Media and Launch One 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 Launch One 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 Launch One Acquisition, you can compare the effects of market volatilities on International Media and Launch One 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 Launch One. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and Launch One.

Diversification Opportunities for International Media and Launch One

0.0

Correlation Coefficient

International Media  Launch One

Pay attention - limited upside

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

Pair Corralation between International Media and Launch One

If you would invest  1,010  in Launch One Acquisition on December 24, 2024 and sell it today you would earn a total of  11.00  from holding Launch One Acquisition or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

International Media Acquisitio  vs.  Launch One Acquisition

International Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Media Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, International Media is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Launch One Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Launch One is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with International Media and Launch One

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

The idea behind International Media Acquisition and Launch One Acquisition 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.