Correlation Between Entravision Communications and Paramount Global

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

By analyzing existing cross correlation between Entravision Communications and Paramount Global Class, you can compare the effects of market volatilities on Entravision Communications and Paramount Global 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 Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Paramount Global.

Diversification Opportunities for Entravision Communications and Paramount Global

0.03

Correlation Coefficient

Entravision Communications  Paramount Global

Significant diversification

The 3 months correlation between Entravision and Paramount is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Paramount Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global Class 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 Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global Class has no effect on the direction of Entravision Communications i.e., Entravision Communications and Paramount Global go up and down completely randomly.

Pair Corralation between Entravision Communications and Paramount Global

Considering the 90-day investment horizon Entravision Communications is expected to generate 0.76 times more return on investment than Paramount Global. However, Entravision Communications is 1.32 times less risky than Paramount Global. It trades about 0.04 of its potential returns per unit of risk. Paramount Global Class is currently generating about -0.26 per unit of risk. If you would invest  228.00  in Entravision Communications on June 29, 2025 and sell it today you would earn a total of  10.00  from holding Entravision Communications or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	46.03%
Values	Daily Returns

Entravision Communications  vs.  Paramount Global Class

Entravision Communications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Entravision Communications may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Paramount Global Class

Risk-Adjusted Performance

Weakest

Over the last 90 days Paramount Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in October 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Entravision Communications and Paramount Global

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

The idea behind Entravision Communications and Paramount Global Class 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.