Correlation Between C Media and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both C Media and Joinsoon Electronics 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 C Media and Joinsoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Media Electronics and Joinsoon Electronics MFG, you can compare the effects of market volatilities on C Media and Joinsoon Electronics 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 C Media with a short position of Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Joinsoon Electronics.
Diversification Opportunities for C Media and Joinsoon Electronics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 6237 and Joinsoon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG and C Media 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 C Media Electronics are associated (or correlated) with Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of C Media i.e., C Media and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between C Media and Joinsoon Electronics
Assuming the 90 days trading horizon C Media Electronics is expected to generate 0.68 times more return on investment than Joinsoon Electronics. However, C Media Electronics is 1.47 times less risky than Joinsoon Electronics. It trades about -0.1 of its potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about -0.1 per unit of risk. If you would invest 4,985 in C Media Electronics on September 1, 2024 and sell it today you would lose (205.00) from holding C Media Electronics or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
C Media Electronics vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| C Media Electronics |
| Joinsoon Electronics MFG |
C Media and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Joinsoon Electronics
The main advantage of trading using opposite C Media and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| C Media vs. Grand Ocean Retail | C Media vs. Acelon Chemicals Fiber | C Media vs. Great China Metal | C Media vs. FarGlory Hotel Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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