Correlation Between Ciwen Media and Yantai North

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

Diversification Opportunities for Ciwen Media and Yantai North

0.67

Correlation Coefficient

Ciwen Media  Yantai North

Poor diversification

The 3 months correlation between Ciwen and Yantai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ciwen Media Co and Yantai North Andre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai North Andre 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 Yantai North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai North Andre has no effect on the direction of Ciwen Media i.e., Ciwen Media and Yantai North go up and down completely randomly.

Pair Corralation between Ciwen Media and Yantai North

Assuming the 90 days trading horizon Ciwen Media is expected to generate 3.42 times less return on investment than Yantai North. In addition to that, Ciwen Media is 1.23 times more volatile than Yantai North Andre. It trades about 0.01 of its total potential returns per unit of risk. Yantai North Andre is currently generating about 0.04 per unit of volatility. If you would invest  1,821  in Yantai North Andre on October 10, 2024 and sell it today you would earn a total of  961.00  from holding Yantai North Andre or generate 52.77% return on investment over 90 days.

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

Ciwen Media Co  vs.  Yantai North Andre

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.

Yantai North Andre

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yantai North Andre are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yantai North sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ciwen Media and Yantai North

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

The idea behind Ciwen Media Co and Yantai North Andre 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.