Correlation Between ATRESMEDIA and BC IRON

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

By analyzing existing cross correlation between ATRESMEDIA and BC IRON, you can compare the effects of market volatilities on ATRESMEDIA and BC IRON 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 BC IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and BC IRON.

Diversification Opportunities for ATRESMEDIA and BC IRON

-0.66

Correlation Coefficient

ATRESMEDIA  BC IRON

Excellent diversification

The 3 months correlation between ATRESMEDIA and BC3 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and BC IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC IRON 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 BC IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC IRON has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and BC IRON go up and down completely randomly.

Pair Corralation between ATRESMEDIA and BC IRON

Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 0.91 times more return on investment than BC IRON. However, ATRESMEDIA is 1.09 times less risky than BC IRON. It trades about 0.26 of its potential returns per unit of risk. BC IRON is currently generating about -0.32 per unit of risk. If you would invest  450.00  in ATRESMEDIA on December 11, 2024 and sell it today you would earn a total of  45.00  from holding ATRESMEDIA or generate 10.0% return on investment over 90 days.

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

ATRESMEDIA  vs.  BC IRON

ATRESMEDIA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATRESMEDIA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ATRESMEDIA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BC IRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days BC IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ATRESMEDIA and BC IRON

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

The idea behind ATRESMEDIA and BC IRON 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 Stocks Directory module to find actively traded stocks across global markets.