Correlation Between C Media and Provision Information
Can any of the company-specific risk be diversified away by investing in both C Media and Provision Information 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 Provision Information 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 Provision Information CoLtd, you can compare the effects of market volatilities on C Media and Provision Information 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 Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Provision Information.
Diversification Opportunities for C Media and Provision Information
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 6237 and Provision is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information 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 Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of C Media i.e., C Media and Provision Information go up and down completely randomly.
Pair Corralation between C Media and Provision Information
Assuming the 90 days trading horizon C Media Electronics is expected to generate 5.47 times more return on investment than Provision Information. However, C Media is 5.47 times more volatile than Provision Information CoLtd. It trades about 0.22 of its potential returns per unit of risk. Provision Information CoLtd is currently generating about -0.14 per unit of risk. If you would invest 4,740 in C Media Electronics on October 23, 2024 and sell it today you would earn a total of 1,050 from holding C Media Electronics or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Provision Information CoLtd
Performance |
| Timeline |
| C Media Electronics |
| Provision Information |
C Media and Provision Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Provision Information
The main advantage of trading using opposite C Media and Provision Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Provision Information 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 Provision Information will offset losses from the drop in Provision Information's long position.| C Media vs. Mospec Semiconductor Corp | C Media vs. Powerchip Semiconductor Manufacturing | C Media vs. Davicom Semiconductor | C Media vs. WinMate Communication INC |
| Provision Information vs. Sporton International | Provision Information vs. Shan Loong Transportation Co | Provision Information vs. Camellia Metal Co | Provision Information vs. Taiwan Mobile 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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