Correlation Between C Media and Camellia Metal

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

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

Diversification Opportunities for C Media and Camellia Metal

0.13

Correlation Coefficient

C Media  Camellia Metal

Average diversification

The 3 months correlation between 6237 and Camellia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and C Media 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 C Media Electronics are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of C Media i.e., C Media and Camellia Metal go up and down completely randomly.

Pair Corralation between C Media and Camellia Metal

Assuming the 90 days trading horizon C Media Electronics is expected to under-perform the Camellia Metal. In addition to that, C Media is 3.86 times more volatile than Camellia Metal Co. It trades about -0.02 of its total potential returns per unit of risk. Camellia Metal Co is currently generating about 0.04 per unit of volatility. If you would invest  1,465  in Camellia Metal Co on December 25, 2024 and sell it today you would earn a total of  25.00  from holding Camellia Metal Co or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

C Media Electronics  vs.  Camellia Metal Co

C Media Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days C Media Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, C Media is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Camellia Metal

Risk-Adjusted Performance

Weak

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

Pair Trading with C Media and Camellia Metal

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

The idea behind C Media Electronics and Camellia Metal Co 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.