Correlation Between C Media and Trusval Technology

Can any of the company-specific risk be diversified away by investing in both C Media and Trusval Technology 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 Trusval Technology 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 Trusval Technology Co, you can compare the effects of market volatilities on C Media and Trusval Technology 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 Trusval Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Trusval Technology.

Diversification Opportunities for C Media and Trusval Technology

0.23

Correlation Coefficient

C Media  Trusval Technology

Modest diversification

The 3 months correlation between 6237 and Trusval is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Trusval Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trusval Technology 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 Trusval Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trusval Technology has no effect on the direction of C Media i.e., C Media and Trusval Technology go up and down completely randomly.

Pair Corralation between C Media and Trusval Technology

Assuming the 90 days trading horizon C Media is expected to generate 5.55 times less return on investment than Trusval Technology. In addition to that, C Media is 1.0 times more volatile than Trusval Technology Co. It trades about 0.02 of its total potential returns per unit of risk. Trusval Technology Co is currently generating about 0.1 per unit of volatility. If you would invest  5,518  in Trusval Technology Co on September 18, 2024 and sell it today you would earn a total of  12,382  from holding Trusval Technology Co or generate 224.39% return on investment over 90 days.

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

C Media Electronics  vs.  Trusval Technology Co

C Media Electronics

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in C Media Electronics are ranked lower than 4 (%) 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 January 2025.

Trusval Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trusval Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with C Media and Trusval Technology

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

The idea behind C Media Electronics and Trusval Technology 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.