Correlation Between Media and Midsona AB

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

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

Diversification Opportunities for Media and Midsona AB

0.0

Correlation Coefficient

Media  Midsona AB

Pay attention - limited upside

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

Pair Corralation between Media and Midsona AB

Assuming the 90 days trading horizon Media and Games is expected to under-perform the Midsona AB. But the stock apears to be less risky and, when comparing its historical volatility, Media and Games is 1.01 times less risky than Midsona AB. The stock trades about -0.23 of its potential returns per unit of risk. The Midsona AB is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  859.00  in Midsona AB on September 18, 2024 and sell it today you would lose (45.00) from holding Midsona AB or give up 5.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Media and Games  vs.  Midsona AB

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Media is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Midsona AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Midsona AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Media and Midsona AB

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

The idea behind Media and Games and Midsona AB 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.