Correlation Between Maven Wireless and AcadeMedia

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

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

Diversification Opportunities for Maven Wireless and AcadeMedia

-0.33

Correlation Coefficient

Maven Wireless  AcadeMedia

Very good diversification

The 3 months correlation between Maven and AcadeMedia is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Maven Wireless Sweden and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Maven Wireless 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 Maven Wireless Sweden are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Maven Wireless i.e., Maven Wireless and AcadeMedia go up and down completely randomly.

Pair Corralation between Maven Wireless and AcadeMedia

Assuming the 90 days trading horizon Maven Wireless Sweden is expected to under-perform the AcadeMedia. In addition to that, Maven Wireless is 2.42 times more volatile than AcadeMedia AB. It trades about -0.05 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about 0.3 per unit of volatility. If you would invest  5,930  in AcadeMedia AB on December 2, 2024 and sell it today you would earn a total of  1,910  from holding AcadeMedia AB or generate 32.21% return on investment over 90 days.

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

Maven Wireless Sweden  vs.  AcadeMedia AB

Maven Wireless Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maven Wireless Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AcadeMedia AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AcadeMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maven Wireless and AcadeMedia

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

The idea behind Maven Wireless Sweden and AcadeMedia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.