Correlation Between One Media and Advanced Medical

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

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

Diversification Opportunities for One Media and Advanced Medical

0.45

Correlation Coefficient

One Media  Advanced Medical

Very weak diversification

The 3 months correlation between One and Advanced is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and One 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 One Media iP are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of One Media i.e., One Media and Advanced Medical go up and down completely randomly.

Pair Corralation between One Media and Advanced Medical

Assuming the 90 days trading horizon One Media iP is expected to generate 0.71 times more return on investment than Advanced Medical. However, One Media iP is 1.41 times less risky than Advanced Medical. It trades about 0.01 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.04 per unit of risk. If you would invest  425.00  in One Media iP on September 2, 2024 and sell it today you would earn a total of  0.00  from holding One Media iP or generate 0.0% return on investment over 90 days.

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

One Media iP  vs.  Advanced Medical Solutions

One Media iP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Advanced Medical Sol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Medical Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with One Media and Advanced Medical

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

The idea behind One Media iP and Advanced Medical Solutions 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.