Correlation Between BII Railway and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both BII Railway and CNVISION 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 BII Railway and CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and CNVISION MEDIA, you can compare the effects of market volatilities on BII Railway and CNVISION 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 BII Railway with a short position of CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and CNVISION MEDIA.
Diversification Opportunities for BII Railway and CNVISION MEDIA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BII and CNVISION is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and BII Railway 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 BII Railway Transportation are associated (or correlated) with CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of BII Railway i.e., BII Railway and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between BII Railway and CNVISION MEDIA
Assuming the 90 days horizon BII Railway is expected to generate 1.83 times less return on investment than CNVISION MEDIA. But when comparing it to its historical volatility, BII Railway Transportation is 1.56 times less risky than CNVISION MEDIA. It trades about 0.06 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.35 in CNVISION MEDIA on October 26, 2024 and sell it today you would earn a total of 0.55 from holding CNVISION MEDIA or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. CNVISION MEDIA
Performance |
| Timeline |
| BII Railway Transpor |
| CNVISION MEDIA |
BII Railway and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and CNVISION MEDIA
The main advantage of trading using opposite BII Railway and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, CNVISION 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| BII Railway vs. Axway Software SA | BII Railway vs. GRENKELEASING Dusseldorf | BII Railway vs. Take Two Interactive Software | BII Railway vs. Global Ship Lease |
| CNVISION MEDIA vs. betterU Education Corp | CNVISION MEDIA vs. TEXAS ROADHOUSE | CNVISION MEDIA vs. BII Railway Transportation | CNVISION MEDIA vs. Texas Roadhouse |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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