Correlation Between Crosswood and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Crosswood and Reworld 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 Crosswood and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crosswood and Reworld Media, you can compare the effects of market volatilities on Crosswood and Reworld 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 Crosswood with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crosswood and Reworld Media.
Diversification Opportunities for Crosswood and Reworld Media
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crosswood and Reworld is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Crosswood and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Crosswood 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 Crosswood are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Crosswood i.e., Crosswood and Reworld Media go up and down completely randomly.
Pair Corralation between Crosswood and Reworld Media
Assuming the 90 days trading horizon Crosswood is expected to generate 0.37 times more return on investment than Reworld Media. However, Crosswood is 2.73 times less risky than Reworld Media. It trades about 0.23 of its potential returns per unit of risk. Reworld Media is currently generating about -0.59 per unit of risk. If you would invest 1,050 in Crosswood on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Crosswood or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Crosswood vs. Reworld Media
Performance |
| Timeline |
| Crosswood |
| Reworld Media |
Crosswood and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crosswood and Reworld Media
The main advantage of trading using opposite Crosswood and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crosswood position performs unexpectedly, Reworld 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Crosswood vs. Eutelsat Communications SA | Crosswood vs. Affluent Medical SAS | Crosswood vs. ISPD Network SA | Crosswood vs. Gaztransport Technigaz SAS |
| Reworld Media vs. BEBO Health SA | Reworld Media vs. Seche Environnem | Reworld Media vs. Technip Energies BV | Reworld Media vs. Innelec Multimedia |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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