Correlation Between WRIT Media and American Picture

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

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

Diversification Opportunities for WRIT Media and American Picture

0.35

Correlation Coefficient

WRIT Media  American Picture

Weak diversification

The 3 months correlation between WRIT and American is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding WRIT Media Group and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House and WRIT 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 WRIT Media Group are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of WRIT Media i.e., WRIT Media and American Picture go up and down completely randomly.

Pair Corralation between WRIT Media and American Picture

Given the investment horizon of 90 days WRIT Media Group is expected to generate 8.32 times more return on investment than American Picture. However, WRIT Media is 8.32 times more volatile than American Picture House. It trades about 0.12 of its potential returns per unit of risk. American Picture House is currently generating about 0.02 per unit of risk. If you would invest  0.30  in WRIT Media Group on October 1, 2024 and sell it today you would lose (0.04) from holding WRIT Media Group or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

WRIT Media Group  vs.  American Picture House

WRIT Media Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WRIT Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, WRIT Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

American Picture House

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Picture House has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with WRIT Media and American Picture

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

The idea behind WRIT Media Group and American Picture House 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.