Correlation Between LINMON MEDIA and NORTH MEDIA

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

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

Diversification Opportunities for LINMON MEDIA and NORTH MEDIA

0.53

Correlation Coefficient

LINMON MEDIA  NORTH MEDIA

Very weak diversification

The 3 months correlation between LINMON and NORTH is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LINMON MEDIA LTD and NORTH MEDIA AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTH MEDIA AS and LINMON 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 LINMON MEDIA LTD are associated (or correlated) with NORTH MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTH MEDIA AS has no effect on the direction of LINMON MEDIA i.e., LINMON MEDIA and NORTH MEDIA go up and down completely randomly.

Pair Corralation between LINMON MEDIA and NORTH MEDIA

Assuming the 90 days horizon LINMON MEDIA LTD is expected to generate 2.83 times more return on investment than NORTH MEDIA. However, LINMON MEDIA is 2.83 times more volatile than NORTH MEDIA AS. It trades about 0.11 of its potential returns per unit of risk. NORTH MEDIA AS is currently generating about 0.22 per unit of risk. If you would invest  28.00  in LINMON MEDIA LTD on April 21, 2025 and sell it today you would earn a total of  10.00  from holding LINMON MEDIA LTD or generate 35.71% return on investment over 90 days.

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

LINMON MEDIA LTD  vs.  NORTH MEDIA AS

LINMON MEDIA LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LINMON MEDIA LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, LINMON MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

NORTH MEDIA AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NORTH MEDIA AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NORTH MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LINMON MEDIA and NORTH MEDIA

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

The idea behind LINMON MEDIA LTD and NORTH MEDIA AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.