Correlation Between Reservoir Media and Integral

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

By analyzing existing cross correlation between Reservoir Media and Integral Ad Science, you can compare the effects of market volatilities on Reservoir Media and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reservoir Media and Integral.

Diversification Opportunities for Reservoir Media and Integral

0.2

Correlation Coefficient

Reservoir Media  Integral

Modest diversification

The 3 months correlation between Reservoir and Integral is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Reservoir Media i.e., Reservoir Media and Integral go up and down completely randomly.

Pair Corralation between Reservoir Media and Integral

Given the investment horizon of 90 days Reservoir Media is expected to generate 0.83 times more return on investment than Integral. However, Reservoir Media is 1.2 times less risky than Integral. It trades about 0.02 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.01 per unit of risk. If you would invest  777.00  in Reservoir Media on October 9, 2024 and sell it today you would earn a total of  45.00  from holding Reservoir Media or generate 5.79% 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.  Integral Ad Science

Reservoir Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reservoir Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Reservoir Media is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Reservoir Media and Integral

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

The idea behind Reservoir Media and Integral Ad Science 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.