Correlation Between Yulon Finance and C Media

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

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

Diversification Opportunities for Yulon Finance and C Media

-0.5

Correlation Coefficient

Yulon Finance  C Media

Very good diversification

The 3 months correlation between Yulon and 6237 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp 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 Yulon Finance 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 Yulon Finance Corp 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 Yulon Finance i.e., Yulon Finance and C Media go up and down completely randomly.

Pair Corralation between Yulon Finance and C Media

Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the C Media. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 17.85 times less risky than C Media. The stock trades about -0.03 of its potential returns per unit of risk. The C Media Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,940  in C Media Electronics on October 6, 2024 and sell it today you would earn a total of  50.00  from holding C Media Electronics or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.73%
Values	Daily Returns

Yulon Finance Corp  vs.  C Media Electronics

Yulon Finance Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yulon Finance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yulon Finance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

C Media Electronics

Risk-Adjusted Performance

0 of 100

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Yulon Finance and C Media

The main advantage of trading using opposite Yulon Finance and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance 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 Yulon Finance Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.