Correlation Between ATRESMEDIA and JD HEALTH

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

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

Diversification Opportunities for ATRESMEDIA and JD HEALTH

0.68

Correlation Coefficient

ATRESMEDIA  JD HEALTH

Poor diversification

The 3 months correlation between ATRESMEDIA and 8ZN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL and ATRESMEDIA 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 ATRESMEDIA are associated (or correlated) with JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and JD HEALTH go up and down completely randomly.

Pair Corralation between ATRESMEDIA and JD HEALTH

Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 0.44 times more return on investment than JD HEALTH. However, ATRESMEDIA is 2.27 times less risky than JD HEALTH. It trades about 0.21 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about 0.06 per unit of risk. If you would invest  430.00  in ATRESMEDIA on December 21, 2024 and sell it today you would earn a total of  90.00  from holding ATRESMEDIA or generate 20.93% return on investment over 90 days.

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

ATRESMEDIA  vs.  JD HEALTH INTL

ATRESMEDIA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATRESMEDIA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ATRESMEDIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

JD HEALTH INTL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JD HEALTH INTL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JD HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATRESMEDIA and JD HEALTH

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

The idea behind ATRESMEDIA and JD HEALTH INTL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.