Correlation Between Media and FIH MOBILE

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

Diversification Opportunities for Media and FIH MOBILE

-0.53

Correlation Coefficient

Media  FIH MOBILE

Excellent diversification

The 3 months correlation between Media and FIH is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE 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 FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Media i.e., Media and FIH MOBILE go up and down completely randomly.

Pair Corralation between Media and FIH MOBILE

Assuming the 90 days trading horizon Media and Games is expected to under-perform the FIH MOBILE. In addition to that, Media is 1.32 times more volatile than FIH MOBILE. It trades about -0.29 of its total potential returns per unit of risk. FIH MOBILE is currently generating about 0.24 per unit of volatility. If you would invest  10.00  in FIH MOBILE on October 10, 2024 and sell it today you would earn a total of  1.00  from holding FIH MOBILE or generate 10.0% return on investment over 90 days.

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

Media and Games  vs.  FIH MOBILE

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Media is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FIH MOBILE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIH MOBILE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, FIH MOBILE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Media and FIH MOBILE

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

The idea behind Media and Games and FIH MOBILE 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.