Correlation Between Sports Gear and C Media
Can any of the company-specific risk be diversified away by investing in both Sports Gear and C Media 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 Sports Gear and C Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Gear Co and C Media Electronics, you can compare the effects of market volatilities on Sports Gear and C Media 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 Sports Gear with a short position of C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Gear and C Media.
Diversification Opportunities for Sports Gear and C Media
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sports and 6237 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sports Gear Co and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics and Sports Gear 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 Sports Gear Co are associated (or correlated) with C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Sports Gear i.e., Sports Gear and C Media go up and down completely randomly.
Pair Corralation between Sports Gear and C Media
Assuming the 90 days trading horizon Sports Gear Co is expected to generate 0.91 times more return on investment than C Media. However, Sports Gear Co is 1.1 times less risky than C Media. It trades about 0.11 of its potential returns per unit of risk. C Media Electronics is currently generating about -0.02 per unit of risk. If you would invest 6,986 in Sports Gear Co on October 22, 2024 and sell it today you would earn a total of 5,564 from holding Sports Gear Co or generate 79.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Gear Co vs. C Media Electronics
Performance |
| Timeline |
| Sports Gear |
| C Media Electronics |
Sports Gear and C Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Gear and C Media
The main advantage of trading using opposite Sports Gear and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Gear position performs unexpectedly, C Media 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 C Media will offset losses from the drop in C Media's long position.| Sports Gear vs. Feng Tay Enterprises | Sports Gear vs. Pou Chen Corp | Sports Gear vs. Fulgent Sun International | Sports Gear vs. Taiwan Paiho |
| C Media vs. PChome Online | C Media vs. Hi Sharp Electronics | C Media vs. Taiwan Chinsan Electronic | C Media vs. Oceanic Beverages 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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