Correlation Between Associated British and One Media

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

By analyzing existing cross correlation between Associated British Foods and One Media iP, you can compare the effects of market volatilities on Associated British and One 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 Associated British with a short position of One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and One Media.

Diversification Opportunities for Associated British and One Media

-0.49

Correlation Coefficient

Associated British  One Media

Very good diversification

The 3 months correlation between Associated and One is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP and Associated British 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 Associated British Foods are associated (or correlated) with One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Associated British i.e., Associated British and One Media go up and down completely randomly.

Pair Corralation between Associated British and One Media

Assuming the 90 days trading horizon Associated British is expected to generate 1.58 times less return on investment than One Media. In addition to that, Associated British is 1.59 times more volatile than One Media iP. It trades about 0.06 of its total potential returns per unit of risk. One Media iP is currently generating about 0.16 per unit of volatility. If you would invest  390.00  in One Media iP on April 10, 2025 and sell it today you would earn a total of  45.00  from holding One Media iP or generate 11.54% return on investment over 90 days.

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

Associated British Foods  vs.  One Media iP

Associated British Foods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Associated British Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Associated British may actually be approaching a critical reversion point that can send shares even higher in August 2025.

One Media iP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, One Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Associated British and One Media

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

The idea behind Associated British Foods and One Media iP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.