Correlation Between Wilhelmina and Mediaco Holding

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

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

Diversification Opportunities for Wilhelmina and Mediaco Holding

0.63

Correlation Coefficient

Wilhelmina  Mediaco Holding

Poor diversification

The 3 months correlation between Wilhelmina and Mediaco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Mediaco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaco Holding and Wilhelmina 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 Wilhelmina are associated (or correlated) with Mediaco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaco Holding has no effect on the direction of Wilhelmina i.e., Wilhelmina and Mediaco Holding go up and down completely randomly.

Pair Corralation between Wilhelmina and Mediaco Holding

Given the investment horizon of 90 days Wilhelmina is expected to generate 0.5 times more return on investment than Mediaco Holding. However, Wilhelmina is 2.0 times less risky than Mediaco Holding. It trades about -0.07 of its potential returns per unit of risk. Mediaco Holding is currently generating about -0.1 per unit of risk. If you would invest  549.00  in Wilhelmina on September 3, 2024 and sell it today you would lose (152.00) from holding Wilhelmina or give up 27.69% of portfolio value over 90 days.

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

Wilhelmina  vs.  Mediaco Holding

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mediaco Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediaco Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wilhelmina and Mediaco Holding

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

The idea behind Wilhelmina and Mediaco Holding 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.