Correlation Between Color Star and Tegna

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Can any of the company-specific risk be diversified away by investing in both Color Star and Tegna 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 Tegna 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 Tegna Inc, you can compare the effects of market volatilities on Color Star and Tegna 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 Tegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and Tegna.

Diversification Opportunities for Color Star and Tegna

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Color and Tegna is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and Tegna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tegna Inc 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 Tegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tegna Inc has no effect on the direction of Color Star i.e., Color Star and Tegna go up and down completely randomly.

Pair Corralation between Color Star and Tegna

Considering the 90-day investment horizon Color Star Technology is expected to under-perform the Tegna. In addition to that, Color Star is 4.9 times more volatile than Tegna Inc. It trades about -0.01 of its total potential returns per unit of risk. Tegna Inc is currently generating about 0.01 per unit of volatility. If you would invest  1,884  in Tegna Inc on August 27, 2024 and sell it today you would lose (13.00) from holding Tegna Inc or give up 0.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Color Star Technology  vs.  Tegna Inc

 Performance 
       Timeline  
Color Star Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Tegna Inc 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Tegna Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Tegna sustained solid returns over the last few months and may actually be approaching a breakup point.

Color Star and Tegna Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Color Star and Tegna

The main advantage of trading using opposite Color Star and Tegna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Color Star position performs unexpectedly, Tegna 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 Tegna will offset losses from the drop in Tegna's long position.
The idea behind Color Star Technology and Tegna Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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