Correlation Between Color Star and E W

Can any of the company-specific risk be diversified away by investing in both Color Star and E W 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 Color Star and E W into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Color Star Technology and E W Scripps, you can compare the effects of market volatilities on Color Star and E W 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 Color Star with a short position of E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and E W.

Diversification Opportunities for Color Star and E W

-0.02

Correlation Coefficient

Color Star  E W

Good diversification

The 3 months correlation between Color and SSP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps and Color Star 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 Color Star Technology are associated (or correlated) with E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Color Star i.e., Color Star and E W go up and down completely randomly.

Pair Corralation between Color Star and E W

Considering the 90-day investment horizon Color Star Technology is expected to under-perform the E W. But the stock apears to be less risky and, when comparing its historical volatility, Color Star Technology is 1.6 times less risky than E W. The stock trades about -0.29 of its potential returns per unit of risk. The E W Scripps is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  204.00  in E W Scripps on December 26, 2024 and sell it today you would earn a total of  120.00  from holding E W Scripps or generate 58.82% return on investment over 90 days.

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

Color Star Technology  vs.  E W Scripps

Color Star Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

E W Scripps

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E W Scripps are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, E W reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Color Star and E W

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

The idea behind Color Star Technology and E W Scripps 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.