Correlation Between Cayenne Entertainment and Great Computer

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

By analyzing existing cross correlation between Cayenne Entertainment Technology and Great Computer, you can compare the effects of market volatilities on Cayenne Entertainment and Great Computer 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 Cayenne Entertainment with a short position of Great Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayenne Entertainment and Great Computer.

Diversification Opportunities for Cayenne Entertainment and Great Computer

-0.53

Correlation Coefficient

Cayenne Entertainment  Great Computer

Excellent diversification

The 3 months correlation between Cayenne and Great is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cayenne Entertainment Technolo and Great Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Computer and Cayenne Entertainment 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 Cayenne Entertainment Technology are associated (or correlated) with Great Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Computer has no effect on the direction of Cayenne Entertainment i.e., Cayenne Entertainment and Great Computer go up and down completely randomly.

Pair Corralation between Cayenne Entertainment and Great Computer

Assuming the 90 days trading horizon Cayenne Entertainment Technology is expected to generate 1.55 times more return on investment than Great Computer. However, Cayenne Entertainment is 1.55 times more volatile than Great Computer. It trades about 0.35 of its potential returns per unit of risk. Great Computer is currently generating about -0.06 per unit of risk. If you would invest  3,775  in Cayenne Entertainment Technology on December 23, 2024 and sell it today you would earn a total of  6,125  from holding Cayenne Entertainment Technology or generate 162.25% return on investment over 90 days.

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

Cayenne Entertainment Technolo  vs.  Great Computer

Cayenne Entertainment

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cayenne Entertainment Technology are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cayenne Entertainment showed solid returns over the last few months and may actually be approaching a breakup point.

Great Computer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great Computer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Cayenne Entertainment and Great Computer

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

The idea behind Cayenne Entertainment Technology and Great Computer 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.