Correlation Between Rising Nonferrous and Thinkingdom Media

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

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

Diversification Opportunities for Rising Nonferrous and Thinkingdom Media

-0.36

Correlation Coefficient

Rising Nonferrous  Thinkingdom Media

Very good diversification

The 3 months correlation between Rising and Thinkingdom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Thinkingdom Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkingdom Media and Rising Nonferrous 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 Rising Nonferrous Metals are associated (or correlated) with Thinkingdom Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkingdom Media has no effect on the direction of Rising Nonferrous i.e., Rising Nonferrous and Thinkingdom Media go up and down completely randomly.

Pair Corralation between Rising Nonferrous and Thinkingdom Media

Assuming the 90 days trading horizon Rising Nonferrous Metals is expected to under-perform the Thinkingdom Media. But the stock apears to be less risky and, when comparing its historical volatility, Rising Nonferrous Metals is 1.27 times less risky than Thinkingdom Media. The stock trades about -0.01 of its potential returns per unit of risk. The Thinkingdom Media Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,789  in Thinkingdom Media Group on October 25, 2024 and sell it today you would earn a total of  126.00  from holding Thinkingdom Media Group or generate 7.04% return on investment over 90 days.

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

Rising Nonferrous Metals  vs.  Thinkingdom Media Group

Rising Nonferrous Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rising Nonferrous Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Rising Nonferrous is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thinkingdom Media

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thinkingdom Media Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Thinkingdom Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Rising Nonferrous and Thinkingdom Media

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

The idea behind Rising Nonferrous Metals and Thinkingdom Media Group 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.

Check out your portfolio center.

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.