Correlation Between Entravision Communications and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and Postal Savings 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 Entravision Communications and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and Postal Savings Bank, you can compare the effects of market volatilities on Entravision Communications and Postal Savings 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 Entravision Communications with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Postal Savings.
Diversification Opportunities for Entravision Communications and Postal Savings
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Entravision and Postal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and Entravision Communications 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 Entravision Communications are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Entravision Communications i.e., Entravision Communications and Postal Savings go up and down completely randomly.
Pair Corralation between Entravision Communications and Postal Savings
Assuming the 90 days horizon Entravision Communications is expected to generate 2.05 times more return on investment than Postal Savings. However, Entravision Communications is 2.05 times more volatile than Postal Savings Bank. It trades about 0.12 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.16 per unit of risk. If you would invest 158.00 in Entravision Communications on April 24, 2025 and sell it today you would earn a total of 40.00 from holding Entravision Communications or generate 25.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Entravision Communications vs. Postal Savings Bank
Performance |
Timeline |
Entravision Communications |
Postal Savings Bank |
Entravision Communications and Postal Savings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Entravision Communications and Postal Savings
The main advantage of trading using opposite Entravision Communications and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.Entravision Communications vs. News Corporation | Entravision Communications vs. News Corporation | Entravision Communications vs. Nexstar Media Group | Entravision Communications vs. ITV plc |
Postal Savings vs. Easy Software AG | Postal Savings vs. Addtech AB | Postal Savings vs. CORNISH METALS INC | Postal Savings vs. Amkor Technology |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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