Correlation Between LINMON MEDIA and Entravision Communications

Can any of the company-specific risk be diversified away by investing in both LINMON MEDIA and Entravision Communications 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 Entravision Communications 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 Entravision Communications, you can compare the effects of market volatilities on LINMON MEDIA and Entravision Communications 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 Entravision Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINMON MEDIA and Entravision Communications.

Diversification Opportunities for LINMON MEDIA and Entravision Communications

0.8

Correlation Coefficient

LINMON MEDIA  Entravision Communications

Very poor diversification

The 3 months correlation between LINMON and Entravision is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding LINMON MEDIA LTD and Entravision Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entravision Communications 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 Entravision Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entravision Communications has no effect on the direction of LINMON MEDIA i.e., LINMON MEDIA and Entravision Communications go up and down completely randomly.

Pair Corralation between LINMON MEDIA and Entravision Communications

Assuming the 90 days horizon LINMON MEDIA LTD is expected to generate 1.58 times more return on investment than Entravision Communications. However, LINMON MEDIA is 1.58 times more volatile than Entravision Communications. It trades about 0.12 of its potential returns per unit of risk. Entravision Communications is currently generating about 0.16 per unit of risk. If you would invest  28.00  in LINMON MEDIA LTD on April 20, 2025 and sell it today you would earn a total of  11.00  from holding LINMON MEDIA LTD or generate 39.29% return on investment over 90 days.

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

LINMON MEDIA LTD  vs.  Entravision Communications

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 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LINMON MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

Entravision Communications

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Entravision Communications reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LINMON MEDIA and Entravision Communications

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

The idea behind LINMON MEDIA LTD and Entravision Communications 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.