Correlation Between TJ Media and Ray

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

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

Diversification Opportunities for TJ Media and Ray

0.73

Correlation Coefficient

TJ Media  Ray

Poor diversification

The 3 months correlation between 032540 and Ray is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and Ray Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ray Co and TJ 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 TJ media Co are associated (or correlated) with Ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ray Co has no effect on the direction of TJ Media i.e., TJ Media and Ray go up and down completely randomly.

Pair Corralation between TJ Media and Ray

Assuming the 90 days trading horizon TJ media Co is expected to generate 0.36 times more return on investment than Ray. However, TJ media Co is 2.76 times less risky than Ray. It trades about -0.06 of its potential returns per unit of risk. Ray Co is currently generating about -0.11 per unit of risk. If you would invest  573,530  in TJ media Co on October 22, 2024 and sell it today you would lose (89,530) from holding TJ media Co or give up 15.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.55%
Values	Daily Returns

TJ media Co  vs.  Ray Co

TJ media

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TJ media Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TJ Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ray Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ray Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TJ Media and Ray

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

The idea behind TJ media Co and Ray Co 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 CEOs Directory module to screen CEOs from public companies around the world.