Correlation Between Color Star and The9
Can any of the company-specific risk be diversified away by investing in both Color Star and The9 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 Color Star and The9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Color Star Technology and The9 Ltd ADR, you can compare the effects of market volatilities on Color Star and The9 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 Color Star with a short position of The9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and The9.
Diversification Opportunities for Color Star and The9
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Color and The9 is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and The9 Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The9 Ltd ADR and Color Star 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 Color Star Technology are associated (or correlated) with The9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The9 Ltd ADR has no effect on the direction of Color Star i.e., Color Star and The9 go up and down completely randomly.
Pair Corralation between Color Star and The9
Considering the 90-day investment horizon Color Star Technology is expected to under-perform the The9. In addition to that, Color Star is 1.81 times more volatile than The9 Ltd ADR. It trades about -0.31 of its total potential returns per unit of risk. The9 Ltd ADR is currently generating about 0.22 per unit of volatility. If you would invest 824.00 in The9 Ltd ADR on November 1, 2024 and sell it today you would earn a total of 807.00 from holding The9 Ltd ADR or generate 97.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Color Star Technology vs. The9 Ltd ADR
Performance |
| Timeline |
| Color Star Technology |
| The9 Ltd ADR |
Color Star and The9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Color Star and The9
The main advantage of trading using opposite Color Star and The9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Color Star position performs unexpectedly, The9 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 The9 will offset losses from the drop in The9's long position.| Color Star vs. Guild Esports Plc | Color Star vs. New Wave Holdings | Color Star vs. Network Media Group | Color Star vs. Hall of Fame |
| The9 vs. Atari SA | The9 vs. Victory Square Technologies | The9 vs. Motorsport Gaming Us | The9 vs. Alpha Esports Tech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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