Correlation Between Cameo Communications and C Media

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

By analyzing existing cross correlation between Cameo Communications and C Media Electronics, you can compare the effects of market volatilities on Cameo Communications and C 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 Cameo Communications with a short position of C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and C Media.

Diversification Opportunities for Cameo Communications and C Media

-0.02

Correlation Coefficient

Cameo Communications  C Media

Good diversification

The 3 months correlation between Cameo and 6237 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics and Cameo Communications 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 Cameo Communications are associated (or correlated) with C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Cameo Communications i.e., Cameo Communications and C Media go up and down completely randomly.

Pair Corralation between Cameo Communications and C Media

Assuming the 90 days trading horizon Cameo Communications is expected to generate 1.22 times less return on investment than C Media. But when comparing it to its historical volatility, Cameo Communications is 1.18 times less risky than C Media. It trades about 0.02 of its potential returns per unit of risk. C Media Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,662  in C Media Electronics on October 4, 2024 and sell it today you would earn a total of  718.00  from holding C Media Electronics or generate 15.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Cameo Communications  vs.  C Media Electronics

Cameo Communications

Risk-Adjusted Performance

3 of 100

Insignificant

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

C Media Electronics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C Media Electronics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, C Media is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cameo Communications and C Media

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

The idea behind Cameo Communications and C Media Electronics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.