Correlation Between Eastern Media and X Legend

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

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

Diversification Opportunities for Eastern Media and X Legend

0.63

Correlation Coefficient

Eastern Media  X Legend

Poor diversification

The 3 months correlation between Eastern and 4994 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Media International and X Legend Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Legend Entertainment and Eastern 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 Eastern Media International are associated (or correlated) with X Legend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Legend Entertainment has no effect on the direction of Eastern Media i.e., Eastern Media and X Legend go up and down completely randomly.

Pair Corralation between Eastern Media and X Legend

If you would invest  1,665  in Eastern Media International on December 27, 2024 and sell it today you would earn a total of  190.00  from holding Eastern Media International or generate 11.41% return on investment over 90 days.

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

Eastern Media International  vs.  X Legend Entertainment Co

Eastern Media Intern

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastern Media International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eastern Media showed solid returns over the last few months and may actually be approaching a breakup point.

X Legend Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days X Legend Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, X Legend is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Eastern Media and X Legend

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

The idea behind Eastern Media International and X Legend Entertainment 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.