Correlation Between American Picture and Paramount Global

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

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

Diversification Opportunities for American Picture and Paramount Global

-0.08

Correlation Coefficient

American Picture  Paramount Global

Good diversification

The 3 months correlation between American and Paramount is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Picture House and Paramount Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global and American Picture 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 American Picture House 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 American Picture i.e., American Picture and Paramount Global go up and down completely randomly.

Pair Corralation between American Picture and Paramount Global

If you would invest  25.00  in American Picture House on September 22, 2024 and sell it today you would earn a total of  0.00  from holding American Picture House or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

American Picture House  vs.  Paramount Global

American Picture House

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Picture House are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, American Picture may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 American Picture and Paramount Global

The main advantage of trading using opposite American Picture and Paramount Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Picture 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 American Picture House 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.