Correlation Between Reservoir Media and Acm Research

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

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

Diversification Opportunities for Reservoir Media and Acm Research

0.38

Correlation Coefficient

Reservoir Media  Acm Research

Weak diversification

The 3 months correlation between Reservoir and Acm is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Acm Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Research and Reservoir 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 Reservoir Media are associated (or correlated) with Acm Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Research has no effect on the direction of Reservoir Media i.e., Reservoir Media and Acm Research go up and down completely randomly.

Pair Corralation between Reservoir Media and Acm Research

Given the investment horizon of 90 days Reservoir Media is expected to generate 0.54 times more return on investment than Acm Research. However, Reservoir Media is 1.84 times less risky than Acm Research. It trades about 0.17 of its potential returns per unit of risk. Acm Research is currently generating about 0.03 per unit of risk. If you would invest  736.00  in Reservoir Media on August 31, 2024 and sell it today you would earn a total of  191.00  from holding Reservoir Media or generate 25.95% return on investment over 90 days.

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

Reservoir Media  vs.  Acm Research

Reservoir Media

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Reservoir Media reported solid returns over the last few months and may actually be approaching a breakup point.

Acm Research

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acm Research are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Acm Research may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Reservoir Media and Acm Research

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

The idea behind Reservoir Media and Acm Research 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.