Correlation Between Reynolds American and Viacom
Can any of the company-specific risk be diversified away by investing in both Reynolds American and Viacom 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 Reynolds American and Viacom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reynolds American and Viacom Inc, you can compare the effects of market volatilities on Reynolds American and Viacom 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 Reynolds American with a short position of Viacom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reynolds American and Viacom.
Diversification Opportunities for Reynolds American and Viacom
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Reynolds and Viacom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reynolds American and Viacom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viacom Inc and Reynolds American 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 Reynolds American are associated (or correlated) with Viacom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viacom Inc has no effect on the direction of Reynolds American i.e., Reynolds American and Viacom go up and down completely randomly.
Pair Corralation between Reynolds American and Viacom
If you would invest (100.00) in Viacom Inc on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Viacom Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reynolds American vs. Viacom Inc
Performance |
| Timeline |
| Reynolds American |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Viacom Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Reynolds American and Viacom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reynolds American and Viacom
The main advantage of trading using opposite Reynolds American and Viacom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reynolds American position performs unexpectedly, Viacom 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 Viacom will offset losses from the drop in Viacom's long position.| Reynolds American vs. Diamond Offshore Drilling | Reynolds American vs. Employers Holdings | Reynolds American vs. KNOT Offshore Partners | Reynolds American vs. LGI Homes |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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