Correlation Between C Media and Scan D
Can any of the company-specific risk be diversified away by investing in both C Media and Scan D 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 Scan D 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 Scan D, you can compare the effects of market volatilities on C Media and Scan D 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 Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Scan D.
Diversification Opportunities for C Media and Scan D
Very good diversification
The 3 months correlation between 6237 and Scan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D 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 Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of C Media i.e., C Media and Scan D go up and down completely randomly.
Pair Corralation between C Media and Scan D
Assuming the 90 days trading horizon C Media Electronics is expected to generate 3.07 times more return on investment than Scan D. However, C Media is 3.07 times more volatile than Scan D. It trades about 0.03 of its potential returns per unit of risk. Scan D is currently generating about -0.03 per unit of risk. If you would invest 4,652 in C Media Electronics on October 12, 2024 and sell it today you would earn a total of 878.00 from holding C Media Electronics or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Scan D
Performance |
| Timeline |
| C Media Electronics |
| Scan D |
C Media and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Scan D
The main advantage of trading using opposite C Media and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D's long position.| C Media vs. Taiwan Semiconductor Manufacturing | C Media vs. MediaTek | C Media vs. United Microelectronics | C Media vs. Novatek Microelectronics Corp |
| Scan D vs. C Media Electronics | Scan D vs. Wha Yu Industrial | Scan D vs. Compal Electronics | Scan D vs. ABC Taiwan 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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