Correlation Between Inuvo and Network CN
Can any of the company-specific risk be diversified away by investing in both Inuvo and Network CN 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 Inuvo and Network CN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inuvo Inc and Network CN, you can compare the effects of market volatilities on Inuvo and Network CN 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 Inuvo with a short position of Network CN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inuvo and Network CN.
Diversification Opportunities for Inuvo and Network CN
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inuvo and Network is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Inuvo Inc and Network CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network CN and Inuvo 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 Inuvo Inc are associated (or correlated) with Network CN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network CN has no effect on the direction of Inuvo i.e., Inuvo and Network CN go up and down completely randomly.
Pair Corralation between Inuvo and Network CN
Given the investment horizon of 90 days Inuvo is expected to generate 34.23 times less return on investment than Network CN. But when comparing it to its historical volatility, Inuvo Inc is 15.38 times less risky than Network CN. It trades about 0.06 of its potential returns per unit of risk. Network CN is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Network CN on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Network CN or generate 1525.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Inuvo Inc vs. Network CN
Performance |
| Timeline |
| Inuvo Inc |
| Network CN |
Inuvo and Network CN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inuvo and Network CN
The main advantage of trading using opposite Inuvo and Network CN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inuvo position performs unexpectedly, Network CN 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 Network CN will offset losses from the drop in Network CN's long position.| Inuvo vs. MGO Global Common | Inuvo vs. Baosheng Media Group | Inuvo vs. National CineMedia | Inuvo vs. Xunlei Ltd Adr |
| Network CN vs. Mesa Air Group | Network CN vs. The9 Ltd ADR | Network CN vs. Boyd Gaming | Network CN vs. Norfolk Southern |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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