Correlation Between Cinda Securities and Mega Info

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

By analyzing existing cross correlation between Cinda Securities Co and Mega info Media CoLtd, you can compare the effects of market volatilities on Cinda Securities and Mega Info 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 Cinda Securities with a short position of Mega Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinda Securities and Mega Info.

Diversification Opportunities for Cinda Securities and Mega Info

0.27

Correlation Coefficient

Cinda Securities  Mega Info

Modest diversification

The 3 months correlation between Cinda and Mega is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cinda Securities Co and Mega info Media CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega info Media and Cinda Securities 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 Cinda Securities Co are associated (or correlated) with Mega Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega info Media has no effect on the direction of Cinda Securities i.e., Cinda Securities and Mega Info go up and down completely randomly.

Pair Corralation between Cinda Securities and Mega Info

Assuming the 90 days trading horizon Cinda Securities Co is expected to under-perform the Mega Info. But the stock apears to be less risky and, when comparing its historical volatility, Cinda Securities Co is 2.15 times less risky than Mega Info. The stock trades about -0.08 of its potential returns per unit of risk. The Mega info Media CoLtd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,089  in Mega info Media CoLtd on October 26, 2024 and sell it today you would earn a total of  43.00  from holding Mega info Media CoLtd or generate 3.95% return on investment over 90 days.

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

Cinda Securities Co  vs.  Mega info Media CoLtd

Cinda Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cinda Securities Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mega info Media

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mega info Media CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mega Info may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cinda Securities and Mega Info

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

The idea behind Cinda Securities Co and Mega info Media CoLtd 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..