Correlation Between C Media and Professional Computer
Can any of the company-specific risk be diversified away by investing in both C Media and Professional Computer 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 Professional Computer 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 Professional Computer Technology, you can compare the effects of market volatilities on C Media and Professional Computer 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 Professional Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Professional Computer.
Diversification Opportunities for C Media and Professional Computer
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 6237 and Professional is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Professional Computer Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Computer 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 Professional Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Computer has no effect on the direction of C Media i.e., C Media and Professional Computer go up and down completely randomly.
Pair Corralation between C Media and Professional Computer
Assuming the 90 days trading horizon C Media Electronics is expected to generate 1.16 times more return on investment than Professional Computer. However, C Media is 1.16 times more volatile than Professional Computer Technology. It trades about -0.02 of its potential returns per unit of risk. Professional Computer Technology is currently generating about -0.06 per unit of risk. If you would invest 4,980 in C Media Electronics on September 14, 2024 and sell it today you would lose (60.00) from holding C Media Electronics or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Professional Computer Technolo
Performance |
| Timeline |
| C Media Electronics |
| Professional Computer |
C Media and Professional Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Professional Computer
The main advantage of trading using opposite C Media and Professional Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Professional Computer 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 Professional Computer will offset losses from the drop in Professional Computer'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 |
| Professional Computer vs. Tehmag Foods | Professional Computer vs. Orient Semiconductor Electronics | Professional Computer vs. Power Wind Health | Professional Computer 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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