Correlation Between Media Investment and Millenium Hotels

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Can any of the company-specific risk be diversified away by investing in both Media Investment and Millenium Hotels 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 Media Investment and Millenium Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Investment Optimization and Millenium Hotels Real, you can compare the effects of market volatilities on Media Investment and Millenium Hotels 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 Media Investment with a short position of Millenium Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Investment and Millenium Hotels.

Diversification Opportunities for Media Investment and Millenium Hotels

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Media and Millenium is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Media Investment Optimization and Millenium Hotels Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millenium Hotels Real and Media Investment 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 Media Investment Optimization are associated (or correlated) with Millenium Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millenium Hotels Real has no effect on the direction of Media Investment i.e., Media Investment and Millenium Hotels go up and down completely randomly.

Pair Corralation between Media Investment and Millenium Hotels

Assuming the 90 days trading horizon Media Investment Optimization is expected to under-perform the Millenium Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Media Investment Optimization is 2.35 times less risky than Millenium Hotels. The stock trades about -0.25 of its potential returns per unit of risk. The Millenium Hotels Real is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  226.00  in Millenium Hotels Real on April 23, 2025 and sell it today you would earn a total of  124.00  from holding Millenium Hotels Real or generate 54.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Media Investment Optimization  vs.  Millenium Hotels Real

 Performance 
       Timeline  
Media Investment Opt 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Media Investment Optimization has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Millenium Hotels Real 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Millenium Hotels Real are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Millenium Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Media Investment and Millenium Hotels Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Media Investment and Millenium Hotels

The main advantage of trading using opposite Media Investment and Millenium Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Investment position performs unexpectedly, Millenium Hotels 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 Millenium Hotels will offset losses from the drop in Millenium Hotels' long position.
The idea behind Media Investment Optimization and Millenium Hotels Real 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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