Correlation Between C Media and Eastern Media
Can any of the company-specific risk be diversified away by investing in both C Media and Eastern 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 C Media and Eastern Media 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 Eastern Media International, you can compare the effects of market volatilities on C Media and Eastern 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 C Media with a short position of Eastern Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Eastern Media.
Diversification Opportunities for C Media and Eastern Media
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 6237 and Eastern is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Eastern Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Media Intern 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 Eastern Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Media Intern has no effect on the direction of C Media i.e., C Media and Eastern Media go up and down completely randomly.
Pair Corralation between C Media and Eastern Media
Assuming the 90 days trading horizon C Media Electronics is expected to generate 2.16 times more return on investment than Eastern Media. However, C Media is 2.16 times more volatile than Eastern Media International. It trades about 0.11 of its potential returns per unit of risk. Eastern Media International is currently generating about -0.09 per unit of risk. If you would invest 4,340 in C Media Electronics on September 12, 2024 and sell it today you would earn a total of 690.00 from holding C Media Electronics or generate 15.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
C Media Electronics vs. Eastern Media International
Performance |
Timeline |
C Media Electronics |
Eastern Media Intern |
C Media and Eastern Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with C Media and Eastern Media
The main advantage of trading using opposite C Media and Eastern Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Eastern 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 Eastern Media will offset losses from the drop in Eastern Media's long position.C Media vs. WIN Semiconductors | C Media vs. GlobalWafers Co | C Media vs. Novatek Microelectronics Corp | C Media vs. Ruentex Development Co |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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