Correlation Between Ciwen Media and Jahen Household

Can any of the company-specific risk be diversified away by investing in both Ciwen Media and Jahen Household 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 Ciwen Media and Jahen Household into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ciwen Media Co and Jahen Household Products, you can compare the effects of market volatilities on Ciwen Media and Jahen Household 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 Ciwen Media with a short position of Jahen Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciwen Media and Jahen Household.

Diversification Opportunities for Ciwen Media and Jahen Household

0.83

Correlation Coefficient

Ciwen Media  Jahen Household

Very poor diversification

The 3 months correlation between Ciwen and Jahen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ciwen Media Co and Jahen Household Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahen Household Products and Ciwen Media 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 Ciwen Media Co are associated (or correlated) with Jahen Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahen Household Products has no effect on the direction of Ciwen Media i.e., Ciwen Media and Jahen Household go up and down completely randomly.

Pair Corralation between Ciwen Media and Jahen Household

Assuming the 90 days trading horizon Ciwen Media Co is expected to generate 1.17 times more return on investment than Jahen Household. However, Ciwen Media is 1.17 times more volatile than Jahen Household Products. It trades about 0.01 of its potential returns per unit of risk. Jahen Household Products is currently generating about -0.02 per unit of risk. If you would invest  669.00  in Ciwen Media Co on October 25, 2024 and sell it today you would lose (81.00) from holding Ciwen Media Co or give up 12.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Ciwen Media Co  vs.  Jahen Household Products

Ciwen Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ciwen Media Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ciwen Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jahen Household Products

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Jahen Household Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jahen Household is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ciwen Media and Jahen Household

The main advantage of trading using opposite Ciwen Media and Jahen Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciwen Media position performs unexpectedly, Jahen Household 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 Jahen Household will offset losses from the drop in Jahen Household's long position.

The idea behind Ciwen Media Co and Jahen Household Products 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.