Correlation Between Media and Idogen AB

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

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

Diversification Opportunities for Media and Idogen AB

0.0

Correlation Coefficient

Media  Idogen AB

Pay attention - limited upside

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

Pair Corralation between Media and Idogen AB

If you would invest  3,630  in Media and Games on September 4, 2024 and sell it today you would earn a total of  350.00  from holding Media and Games or generate 9.64% return on investment over 90 days.

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

Media and Games  vs.  Idogen AB

Media and Games

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Media and Games are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Idogen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idogen AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Idogen AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Media and Idogen AB

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

The idea behind Media and Games and Idogen AB 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.