Correlation Between GPT and CNVISION MEDIA

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

By analyzing existing cross correlation between GPT Group and CNVISION MEDIA, you can compare the effects of market volatilities on GPT and CNVISION MEDIA 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 GPT with a short position of CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT and CNVISION MEDIA.

Diversification Opportunities for GPT and CNVISION MEDIA

-0.3

Correlation Coefficient

GPT  CNVISION MEDIA

Very good diversification

The 3 months correlation between GPT and CNVISION is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and GPT 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 GPT Group are associated (or correlated) with CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of GPT i.e., GPT and CNVISION MEDIA go up and down completely randomly.

Pair Corralation between GPT and CNVISION MEDIA

Assuming the 90 days horizon GPT Group is expected to generate 1.15 times more return on investment than CNVISION MEDIA. However, GPT is 1.15 times more volatile than CNVISION MEDIA. It trades about 0.02 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.0 per unit of risk. If you would invest  244.00  in GPT Group on October 4, 2024 and sell it today you would earn a total of  15.00  from holding GPT Group or generate 6.15% return on investment over 90 days.

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

GPT Group  vs.  CNVISION MEDIA

GPT Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GPT Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CNVISION MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNVISION MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CNVISION MEDIA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GPT and CNVISION MEDIA

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

The idea behind GPT Group and CNVISION MEDIA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.