Correlation Between Gamania Digital and C Media

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

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

Diversification Opportunities for Gamania Digital and C Media

-0.62

Correlation Coefficient

Gamania Digital  C Media

Excellent diversification

The 3 months correlation between Gamania and 6237 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gamania Digital Entertainment 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 Gamania Digital 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 Gamania Digital Entertainment 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 Gamania Digital i.e., Gamania Digital and C Media go up and down completely randomly.

Pair Corralation between Gamania Digital and C Media

Assuming the 90 days trading horizon Gamania Digital Entertainment is expected to under-perform the C Media. But the stock apears to be less risky and, when comparing its historical volatility, Gamania Digital Entertainment is 2.8 times less risky than C Media. The stock trades about -0.11 of its potential returns per unit of risk. The C Media Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5,030  in C Media Electronics on December 4, 2024 and sell it today you would earn a total of  210.00  from holding C Media Electronics or generate 4.17% return on investment over 90 days.

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

Gamania Digital Entertainment  vs.  C Media Electronics

Gamania Digital Ente

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamania Digital Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

C Media Electronics

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Gamania Digital and C Media

The main advantage of trading using opposite Gamania Digital and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamania Digital 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 Gamania Digital Entertainment 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.