Correlation Between ATRESMEDIA and TFS FINANCIAL

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

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

Diversification Opportunities for ATRESMEDIA and TFS FINANCIAL

-0.47

Correlation Coefficient

ATRESMEDIA  TFS FINANCIAL

Very good diversification

The 3 months correlation between ATRESMEDIA and TFS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of ATRESMEDIA i.e., ATRESMEDIA and TFS FINANCIAL go up and down completely randomly.

Pair Corralation between ATRESMEDIA and TFS FINANCIAL

Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 0.83 times more return on investment than TFS FINANCIAL. However, ATRESMEDIA is 1.2 times less risky than TFS FINANCIAL. It trades about 0.21 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about -0.02 per unit of risk. If you would invest  431.00  in ATRESMEDIA on December 30, 2024 and sell it today you would earn a total of  89.00  from holding ATRESMEDIA or generate 20.65% return on investment over 90 days.

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

ATRESMEDIA  vs.  TFS FINANCIAL

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.

TFS FINANCIAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TFS FINANCIAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TFS FINANCIAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ATRESMEDIA and TFS FINANCIAL

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

The idea behind ATRESMEDIA and TFS FINANCIAL 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.