Correlation Between Entravision Communications and LINMON MEDIA

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

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

Diversification Opportunities for Entravision Communications and LINMON MEDIA

0.65

Correlation Coefficient

Entravision Communications  LINMON MEDIA

Poor diversification

The 3 months correlation between Entravision and LINMON is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and LINMON MEDIA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINMON MEDIA LTD 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 LINMON MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINMON MEDIA LTD has no effect on the direction of Entravision Communications i.e., Entravision Communications and LINMON MEDIA go up and down completely randomly.

Pair Corralation between Entravision Communications and LINMON MEDIA

Assuming the 90 days horizon Entravision Communications is expected to generate 0.84 times more return on investment than LINMON MEDIA. However, Entravision Communications is 1.19 times less risky than LINMON MEDIA. It trades about 0.04 of its potential returns per unit of risk. LINMON MEDIA LTD is currently generating about -0.03 per unit of risk. If you would invest  162.00  in Entravision Communications on April 4, 2025 and sell it today you would earn a total of  30.00  from holding Entravision Communications or generate 18.52% return on investment over 90 days.

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

Entravision Communications  vs.  LINMON MEDIA LTD

Entravision Communications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Entravision Communications may actually be approaching a critical reversion point that can send shares even higher in August 2025.

LINMON MEDIA LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LINMON MEDIA LTD are ranked lower than 4 (%) 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.

Pair Trading with Entravision Communications and LINMON MEDIA

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

The idea behind Entravision Communications and LINMON MEDIA LTD 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.