Correlation Between Vytrus Biotech and Atresmedia Corporacin

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

By analyzing existing cross correlation between Vytrus Biotech SA and Atresmedia Corporacin de, you can compare the effects of market volatilities on Vytrus Biotech and Atresmedia Corporacin 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 Vytrus Biotech with a short position of Atresmedia Corporacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vytrus Biotech and Atresmedia Corporacin.

Diversification Opportunities for Vytrus Biotech and Atresmedia Corporacin

0.39

Correlation Coefficient

Vytrus Biotech  Atresmedia Corporacin

Weak diversification

The 3 months correlation between Vytrus and Atresmedia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vytrus Biotech SA and Atresmedia Corporacin de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia Corporacin and Vytrus Biotech 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 Vytrus Biotech SA are associated (or correlated) with Atresmedia Corporacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia Corporacin has no effect on the direction of Vytrus Biotech i.e., Vytrus Biotech and Atresmedia Corporacin go up and down completely randomly.

Pair Corralation between Vytrus Biotech and Atresmedia Corporacin

Assuming the 90 days trading horizon Vytrus Biotech is expected to generate 2.94 times less return on investment than Atresmedia Corporacin. In addition to that, Vytrus Biotech is 5.85 times more volatile than Atresmedia Corporacin de. It trades about 0.01 of its total potential returns per unit of risk. Atresmedia Corporacin de is currently generating about 0.11 per unit of volatility. If you would invest  345.00  in Atresmedia Corporacin de on September 12, 2024 and sell it today you would earn a total of  125.00  from holding Atresmedia Corporacin de or generate 36.23% return on investment over 90 days.

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

Vytrus Biotech SA  vs.  Atresmedia Corporacin de

Vytrus Biotech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vytrus Biotech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Atresmedia Corporacin

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atresmedia Corporacin de are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Atresmedia Corporacin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vytrus Biotech and Atresmedia Corporacin

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

The idea behind Vytrus Biotech SA and Atresmedia Corporacin de 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.