Correlation Between Gravity and Integrated Media

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Can any of the company-specific risk be diversified away by investing in both Gravity and Integrated Media 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 Gravity and Integrated Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gravity Co and Integrated Media Technology, you can compare the effects of market volatilities on Gravity and Integrated Media 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 Gravity with a short position of Integrated Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gravity and Integrated Media.

Diversification Opportunities for Gravity and Integrated Media

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Gravity and Integrated is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gravity Co and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec and Gravity 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 Gravity Co are associated (or correlated) with Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Gravity i.e., Gravity and Integrated Media go up and down completely randomly.

Pair Corralation between Gravity and Integrated Media

Given the investment horizon of 90 days Gravity Co is expected to generate 0.54 times more return on investment than Integrated Media. However, Gravity Co is 1.87 times less risky than Integrated Media. It trades about 0.08 of its potential returns per unit of risk. Integrated Media Technology is currently generating about -0.04 per unit of risk. If you would invest  6,956  in Gravity Co on December 29, 2023 and sell it today you would earn a total of  633.00  from holding Gravity Co or generate 9.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gravity Co  vs.  Integrated Media Technology

 Performance 
       Timeline  
Gravity 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Gravity Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gravity may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Integrated Media Tec 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Integrated Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Gravity and Integrated Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gravity and Integrated Media

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

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