Correlation Between C Media and Nan Pao
Can any of the company-specific risk be diversified away by investing in both C Media and Nan Pao 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 Nan Pao 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 Nan Pao Resins, you can compare the effects of market volatilities on C Media and Nan Pao 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 Nan Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Nan Pao.
Diversification Opportunities for C Media and Nan Pao
Significant diversification
The 3 months correlation between 6237 and Nan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Nan Pao Resins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Pao Resins 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 Nan Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Pao Resins has no effect on the direction of C Media i.e., C Media and Nan Pao go up and down completely randomly.
Pair Corralation between C Media and Nan Pao
Assuming the 90 days trading horizon C Media is expected to generate 2.11 times less return on investment than Nan Pao. In addition to that, C Media is 1.25 times more volatile than Nan Pao Resins. It trades about 0.03 of its total potential returns per unit of risk. Nan Pao Resins is currently generating about 0.08 per unit of volatility. If you would invest 17,750 in Nan Pao Resins on September 12, 2024 and sell it today you would earn a total of 14,450 from holding Nan Pao Resins or generate 81.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Nan Pao Resins
Performance |
| Timeline |
| C Media Electronics |
| Nan Pao Resins |
C Media and Nan Pao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Nan Pao
The main advantage of trading using opposite C Media and Nan Pao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Nan Pao 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 Nan Pao will offset losses from the drop in Nan Pao's long position.| C Media vs. WIN Semiconductors | C Media vs. GlobalWafers Co | C Media vs. Novatek Microelectronics Corp | C Media vs. Ruentex Development Co |
| Nan Pao vs. Lelon Electronics Corp | Nan Pao vs. Double Bond Chemical | Nan Pao vs. Pan Asia Chemical | Nan Pao vs. C Media Electronics |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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