Correlation Between Aftermaster and Paramount Global

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

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

Diversification Opportunities for Aftermaster and Paramount Global

0.0

Correlation Coefficient

Aftermaster  Paramount Global

Pay attention - limited upside

The 3 months correlation between Aftermaster and Paramount is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aftermaster and Paramount Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global and Aftermaster 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 Aftermaster are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global has no effect on the direction of Aftermaster i.e., Aftermaster and Paramount Global go up and down completely randomly.

Pair Corralation between Aftermaster and Paramount Global

If you would invest  2,227  in Paramount Global on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Paramount Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.34%
Values	Daily Returns

Aftermaster  vs.  Paramount Global

Aftermaster

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aftermaster has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aftermaster is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Paramount Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aftermaster and Paramount Global

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

The idea behind Aftermaster and Paramount Global 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.