Correlation Between X Legend and Eastern Media

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

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

Diversification Opportunities for X Legend and Eastern Media

0.59

Correlation Coefficient

X Legend  Eastern Media

Very weak diversification

The 3 months correlation between 4994 and Eastern is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Eastern Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Media Intern and X Legend 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 X Legend Entertainment Co are associated (or correlated) with Eastern Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Media Intern has no effect on the direction of X Legend i.e., X Legend and Eastern Media go up and down completely randomly.

Pair Corralation between X Legend and Eastern Media

Assuming the 90 days trading horizon X Legend Entertainment Co is expected to under-perform the Eastern Media. But the stock apears to be less risky and, when comparing its historical volatility, X Legend Entertainment Co is 1.3 times less risky than Eastern Media. The stock trades about -0.03 of its potential returns per unit of risk. The Eastern Media International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,675  in Eastern Media International on December 30, 2024 and sell it today you would earn a total of  160.00  from holding Eastern Media International or generate 9.55% return on investment over 90 days.

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

X Legend Entertainment Co  vs.  Eastern Media International

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.

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 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eastern Media may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with X Legend and Eastern Media

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

The idea behind X Legend Entertainment Co and Eastern Media International 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.